The monetary policy of the central governments releasing water of 140 billion yuan this week

category:Finance
 The monetary policy of the central governments releasing water of 140 billion yuan this week


Yi Gang, governor of the peoples Bank of China, said at the 2020 Financial Street Forum recently that it is necessary to strike a balance between stable growth and risk prevention, neither let the market be short of money nor let the market overflow, and keep the money supply basically matching with the nominal GDP growth rate reflecting potential output.

Talking about the next step of monetary policy, Yi Gang said that a stable monetary policy should be more flexible, moderate and accurate. The implementation of normal monetary policy as long as possible, maintaining a normal and upward sloping yield curve and providing positive incentives for economic entities are conducive to the sustainable development of economy and society, the global competitiveness of RMB assets, and the utilization of two markets and two resources.

On October 15, the central bank carried out 500 billion yuan of 1-year medium-term loan facility (MLF) (including the continuation of the MLF due on October 16) and the 7-day reverse repurchase operation of 50 billion yuan, fully meeting the needs of financial institutions.

Wen bin, chief researcher of Minsheng Bank, said that the central bank increased the open market operation and adopted the combination of reverse repurchase + MLF. On the one hand, the market short-term interest rate was kept close to the central banks policy interest rate level. On the other hand, it oversupplied MLF in the last three months to maintain the overall stability of the market long-term interest rate and meet the needs of financial institutions to increase support for the real economy and reduce financing costs u3002

Wen Bin said that in the next two months, the funds of government bonds issued will speed up spending, which will help improve liquidity before the end of the year. Meanwhile, the CPI and PPI data just released show that inflation is still in a reasonable range, and the probability of RRR reduction and interest rate reduction is expected to decline in the short term. The central bank will continue to use a combination of multiple monetary policy instruments to maintain reasonable and sufficient market liquidity.

The LPR quotation previously announced has remained unchanged for six consecutive months, and the prudent monetary policy is more flexible and moderate. The peoples Bank of China has authorized the National Interbank Funding Center to announce that on October 20, the quoted interest rate (LPR) in the loan market was 3.85% for one-year term (3.85% for the last time) and 4.65% (4.65% for the last time) for more than five-year term. Huang Wentao, chief analyst of macro fixed income of China Securities construction investment, believes that the recent monetary policy operation of the central bank mainly focuses on the precise operation of open market operation, and the positioning of monetary policy in important meetings is not too much flooding, so the expectation of reducing reserve rate and interest rate is relatively low. As for the later trend of monetary policy, the overall liquidity will remain moderate, but the continuous easing trend is not expected to continue. In the later stage, the monetary policy will continue to operate with precision and structural adjustment, and the policy keynote will remain relatively stable. (Zhongxin Jingwei APP) source of this article: Chen Hequn, editor in charge of Zhongxin Jingwei_ NB12679

Huang Wentao, chief analyst of macro fixed income of China Securities construction investment, believes that the recent monetary policy operation of the central bank mainly focuses on the precise operation of open market operation, and the positioning of monetary policy in important meetings is not too much flooding, so the expectation of reducing reserve rate and interest rate is relatively low. As for the later trend of monetary policy, the overall liquidity will remain moderate, but the continuous easing trend is not expected to continue. In the later stage, the monetary policy will continue to operate with precision and structural adjustment, and the policy keynote will remain relatively stable. (Zhongxin Jingwei APP)