The dramatic scene was staged yesterday – the central bank’s reverse repurchase of rare “plus yardsâ€, but the market’s expectation of a July RRR cut has intensified.
On July 3, the central bank issued an announcement to carry out reverse repurchase operations by means of interest rate bidding. Among them, the 7-day reverse repurchase scale was 38 billion yuan, the winning bid rate was 3.95%, and the 14-day reverse repurchase scale was 105 billion yuan. The winning bid rate is 4.10%.
This is after the implementation of more than 100 billion yuan reverse repurchase last week, the central bank has rarely continued to implement huge reverse repurchase, the total amount of funds released in two weeks of reverse repurchase has reached 268 billion yuan.
For this reason, market participants believe that after last week's reverse repurchase to help the interbank market funds face the end of the season, the central bank continued to "transfusion" to the market this week, intending to ease the deposit of the deposit on the 5th of this month. The financial pressure brought by the day.
"Because the bank's 'deposit' at the end of June led to an increase in the deposit base, the market expects that the fund will be tight again when the deposit reserve is replenished on the 5th." A state-owned large bank fund trader told reporters.
So far, coupled with the amount of funds in the open market in the past two weeks, while the central bank and the repurchase have both suspended, the central bank has injected liquidity into the market for 278 billion yuan for two consecutive weeks, which is almost equivalent to lowering the RRR.
After more than 100 billion reverse repurchase "transfusion", short-term funds suddenly became abundant yesterday. In the inter-bank repo market, the overnight repo rate weighted average interest rate fell 37 basis points from the previous trading day.
Despite this, the market's tight expectations for future funding have not eased.
Jiang Chao, chief macro analyst of Guotai Junan Research Institute, told reporters that due to the continued low level of foreign exchange in the future and the sharp decline in the amount of funds due in the open market in July, the market is still not optimistic about the funds in July, only through the deposit The downward adjustment of the rate can completely change the current situation of high capital prices.
Yesterday's capital price also reflected the market's tight expectations for medium and long-term funds. The 7-day repo rate remained at a high of 4.17%, once hitting an intraday high of 4.60%; while the 21-day and January repo rates both rose slightly.
"Reverse repurchase is only a short-term tool. After 7 to 14 days of expiration, if the policy of declining is not issued, the scale of reverse repo will be more and more large, and finally it must be resolved through RRR cuts."
Fu Xiongguang, a macro analyst of the fixed income department of CITIC Securities, told reporters that reverse repurchase could not replace the RRR cut, and the scale of reverse repurchase increased. Instead, it released a signal to the market that the deposit reserve ratio is expected to be lowered again in July. Or before and after the release of economic data this month.
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