According to the news on the website of the central bank at 8 a.m. on July 8, in order to maintain reasonable and sufficient liquidity in the banking system and improve the accuracy and effectiveness of open market operations, from now on, the People's Bank of China will carry out temporary repurchase or temporary reverse repurchase operations according to the situation.
The time is 16:00~16:20 on working days, the term is overnight, the fixed interest rate and quantity bidding are adopted, and the interest rate of the temporary overnight positive and reverse repo operation is 7-day reverse repo operation interest rate minus 20bp and plus 50bp respectively. If the operation is carried out on the same day, the Open Market Business Transaction Announcement will be issued after the operation is completed.
Source: Monetary Policy Division;
In this regard, the relevant market personnel said: the operation launched by the People's Bank of China can adjust the market more accurately and timely, and can meet the liquidity needs of various institutions through temporary reverse repurchase operations when market liquidity is tight, so as to ensure the smooth operation of the financial market.
At present, the benchmark interest rate of the short-term market DR007 is 1.8%, that is, the positive repo rate may be the lowest 1.6%, while the reverse repo rate is the highest 2.3%, which prevents large fluctuations in short-term interest rates and maintains the stability of the financial market by controlling the interest rate corridor.
After the central bank narrowed the interest rate corridor, long-term and short-term interest rates rose rapidly.
On the morning of July 8, the yield on interbank cash bonds rose in the short term. The yield on the 30-year Treasury note surged 1.63% and fell back to 0.84% at press time, but still broke through the important 2.5% mark.
Wind data shows that "24 interest-bearing treasury bonds 04" reported 2.295%, and "24 CDB 05" reported 2.375%; The yield on the 30-year "23 Interest-bearing Treasury 23" rose about 2 basis points to 2.5125%.
Data source: Sina Finance;
According to market analysis, the central government's move is intended to make the yield curve steeper and curb the flattening trend, and clarify the short-end interest rate, so as to achieve the smooth transmission of the policy rate to the market interest rate and successfully control the yield curve.
However, it is worth noting that this is not the first time that Yang Ma has taken action to stabilize the market. Not to mention, 6 days ago, the central mother carried out a wave of regularization of the bond market.
On July 1, in order to maintain the stable operation of the bond market, the central bank issued an announcement stating that it would recently carry out treasury bond borrowing operations for some primary dealers in open market business.
Source: Monetary Policy Division;
After the announcement, on the afternoon of July 1, the yield of active treasury bonds rose sharply, with the yield on 10-year treasury bonds and the yield on 30-year treasury bonds rising to 2.25% and 2.48%, respectively, up 4.28 and 5.00 basis points. After the close of the day, Treasury bond futures closed lower across the board.
Source: Wind;
At the close of trading on the second day, the 30-year main contract of treasury bond futures rose 0.28%, the main 10-year contract rose 0.25%, the main 5-year contract rose 0.16%, and the 2-year main contract rose 0.05%.
On July 3, Treasury bond futures closed up across the board, and the main 30-year contract rose sharply, closing up 0.29%. In addition, the main 10-year Treasury bond futures contract rose 0.15%, the 5-year main contract rose 0.10%, and the 2-year main contract rose 0.02%.
On July 4, a number of treasury bond futures fell slightly. The 30-year main contract fell 0.19%, the 10-year main contract fell 0.07%, the 5-year main contract fell 0.03%, and the 2-year main contract fell 0.02%.
After the central bank "announced" the borrowing of government bonds, the yield of medium- and long-term government bonds did not seem to have risen significantly.
So far, the central bank has signed bond borrowing agreements with several major financial institutions. Financial institutions that have signed agreements have hundreds of billions of yuan of medium- and long-term treasury bonds available for lending, and will borrow treasury bonds in an indefinite term and credit mode, and will continue to borrow and sell treasury bonds depending on the operation of the bond market.
Behind this series of actions by the central bank, market analysis has several purposes -
The widening of the interest rate gap between China and the United States, with China's 10-year Treasury bond yield only 2.25%, while the US 10-year Treasury bond yield is 4.42%, which is a reason for the central bank's operation.
Long-term interest rates continue to fall, on the one hand, indicating that the short-term confidence of the market is weakening, and on the other hand, a large number of bank funds are pouring into the bond market, which is not conducive to the stability of the financial market.
Data source: Sina Finance;
The widening of interest rate differentials between China and the United States and the decline in long-term interest rates have put great pressure on the RMB. Through the central bank's buying and selling of treasury bonds, it will affect the supply and demand relationship of the treasury bond market, outperform the bond market, guide long-term interest rates to rise, reduce the pressure of RMB depreciation, and stabilize the exchange rate.
Data source: Baidu Stock Connect; USD/CNH;