Another 500 billion in liquidity investment! LPR decline on 20th of this month

category:Finance
 Another 500 billion in liquidity investment! LPR decline on 20th of this month


The total investment of 1.7 trillion yuan in two days is enough to show the determination of the central bank to stabilize market expectations and boost market confidence during the epidemic prevention and control period. Pan Gongsheng, deputy governor of the peoples Bank of China, recently said that after the opening of the financial market on February 3, the peoples Bank of China will provide sufficient liquidity, increase the intensity of counter cyclical regulation, maintain the reasonable and abundant liquidity of the financial market, and maintain the stable operation of the interest rate in the money market. Especially considering the dual effects of the special period of the epidemic and the delayed opening of the market, the peoples Bank of China will provide liquidity to the market through various monetary policy tools such as open market operation, standing loan facility, re loan and rediscount.

Many insiders believe that the liquidity investment of the central bank in recent two days is beyond expectations. In response, the central bank said that the more than expected liquidity investment will promote the downward trend of interest rates in the money market and bond market, and will further promote the downward trend of interest rates in the loan market, which is conducive to reducing the cost of capital, easing the financial pressure of enterprises, especially small and micro enterprises, expanding the financing scale and supporting the real economy.

At present, it has been reflected in the capital market. On February 4, Shibor (Shanghai interbank offered rate) fell, overnight varieties fell 23.1bp to 2.2730%, 7-day down 19.10bp to 2.4160%, 14-day down 3.5bp to 2.5850%, and 1-month down 4.6bp to 2.76%; as of 12 noon, dr001 weighted average interest rate was 2.2639%, 22.53bp lower than the previous day, and dr007 weighted average interest rate was 2.4105% , down 18.98bp from the previous day.

In terms of structure, the investment in the past two days is a combination of 7-day period and 14-day period, with 7-day period totaling 1.28 trillion yuan and 14-day period totaling 420 billion yuan. Wen bin, chief macro researcher of Minsheng Bank, analyzed that after the expiry of the 7-day reverse repo, the possibility of the central bank replacing the expired reverse repo through MLF at that time could not be ruled out, so as to put in longer-term liquidity and have an impact on the LPR quotation on February 20. This week, the central bank can continue to observe the situation of epidemic prevention and control, price level changes, and make corresponding policy choices. Ma Jun, a member of the monetary policy committee of the peoples Bank of China and a researcher of the National Institute of finance of Tsinghua University, said recently that after the bid winning rate of the open market operation has dropped, the bid winning rate of the medium-term convenient lending operation of the peoples Bank of China in accordance with the Convention in the middle of the month is also expected to drop, and then the LPR reduction period announced on February 20 is expected. Tianfeng securities also mentioned that on the first day of the opening of new spring, the central bank lowered the operating interest rate of reverse repo by 10bp on the basis of large amount of open market investment, which is obviously the special task of the central banks monetary policy based on the epidemic situation. The follow-up operation of the central bank mainly depends on the progress of the epidemic, and there should be one or two times of reduction of the reserve, with a total range of more than 1 percentage point; in addition, the MLF rate and LPR rate in February will be reduced by 10bp respectively. Source: First Financial Editor: Guo Chenqi, nbj9931

In terms of structure, the investment in the past two days is a combination of 7-day period and 14-day period, with 7-day period totaling 1.28 trillion yuan and 14-day period totaling 420 billion yuan. Wen bin, chief macro researcher of Minsheng Bank, analyzed that after the expiry of the 7-day reverse repo, the possibility of the central bank replacing the expired reverse repo through MLF at that time could not be ruled out, so as to put in longer-term liquidity and have an impact on the LPR quotation on February 20. This week, the central bank can continue to observe the situation of epidemic prevention and control, price level changes, and make corresponding policy choices.

Ma Jun, a member of the monetary policy committee of the peoples Bank of China and a researcher of the National Institute of finance of Tsinghua University, said recently that after the bid winning rate of the open market operation has dropped, the bid winning rate of the medium-term convenient lending operation of the peoples Bank of China in accordance with the Convention in the middle of the month is also expected to drop, and then the LPR reduction period announced on February 20 is expected.

Tianfeng securities also mentioned that on the first day of the opening of new spring, the central bank lowered the operating interest rate of reverse repo by 10bp on the basis of large amount of open market investment, which is obviously the special task of the central banks monetary policy based on the epidemic situation. The follow-up operation of the central bank mainly depends on the progress of the epidemic, and there should be one or two times of reduction of the reserve, with a total range of more than 1 percentage point; in addition, the MLF rate and LPR rate in February will be reduced by 10bp respectively.