The central bank ’s 3 billion yuan inverse repurchase for 6 consecutive days: moderately tightening the leverage of the funding debt market to decline slightly

The 21st Century Business Herald reporter Yang Zhijin reported on July 11. The central bank announced that in order to maintain the banking system, the liquidity of the banking system was reasonable and abundant. This is the central bank for 6 consecutive working days for only 3 billion yuan of inverse repurchase reduction operations per day, the minimum operation scale since January 2021, and the longest duration of the shrinkage operation.

The scale of 3 billion reverse repurchase operations is very small, so it is also nicknamed the "land volume" by the market. From the perspective of market participants, this move is mainly to moderately tighten the capital and crack down on the air market for the debt market. Just last week, the bond market leverage also declined slightly.

It is worth noting that although the central bank recovers the liquidity through reverse repurchase, the current capital interest rate remains at a lower level. In the later period, with the realization of wide credit, the situation of the accumulation of funds in banks will improve, and the market interest rate center may rise.

What is the 3 billion reverse repurchase?

"On Monday, the inverse repurchase was 3 billion yuan. It should be said that it was very expected. When the data came out, the market seemed a bit embarrassed. Bond trader said.

Wind data shows that last week (July 4-July 8), the central bank's inverse repurchase was 3 billion yuan daily, with a total expiration of 400 billion yuan, and a net recovery of 385 billion. On July 11, the central bank carried out 3 billion yuan of reverse repurchase operations, with a maturity scale of 3 billion and a net recovery of 200 million. In other words, the central bank's net recovery funds in the past six working days were 385 billion yuan.

"In the past two days, the central bank did not care too much about the capital, and the capital side had risen significantly in the last two days of June. Want to knock on the leveraged repurchase. "The aforementioned the bond trader in the urban commercial bank in Jiangsu.

Yang Yewei, Chief Analyst of Guosheng Gu receiving, said that this year, he also faced the situation of extremely loose liquidity and a sharp rise in market leverage. Therefore, the central bank once again reduced the counter -repurchase standard to 3 billion below 10 billion, reminding the market to control leverage.

Due to insufficient effective demand for the real economy, the accumulation of funds in the inter -bank market has continued to be significantly loose since April, DR001 has dropped to about 1.3%, DR007 drops below 1.7%, and the interest rate of 40BP in 7 days of reverse repurchase policy is 40bp. In this context, the market rolling overnight and leverage is obvious, and the pledge repurchase transaction volume reached a new high.

According to Wind data, the average daily transaction volume of pledged repurchase in the interbank market in March was 4.6 trillion yuan, which rose to about 4.9 trillion and 5.5 trillion in April and May, respectively. The average transaction volume of the pledged repurchase daily in June increased to 6.1 trillion yuan, which hit a peak of 6.45 trillion on June 20. Among them, overnight pledge transactions accounted for the highest proportion, reaching about 90%. This shows that the institutional scroll borrowing overnight funds to configure a longer -term bond for leverage arbitrage to obtain excess returns between the price difference between the rate of interest and the repurchase cost.

In the past, the long -term low interest rate and bond market increased leverage, the central bank will also knock on. For example, from March to May 2020, due to the loose currency, overnight interest rates were lower than 1%, and the market was more common for overnight and leverage.

Senior scholar Yu Chuxin's article "Correct understanding of the monetary policy to deal with very incidents" in late June of that year stated that as liquidity remained reasonable and rich, the currency market interest rate gradually entered a historical low. The lowest value of ten years, and the level of leverage in the interbank market in March has risen to 110%in recent years. Funding and financial risk signs have emerged, and the People's Bank of China has considered the policy tools in time in time.

At the end of the article, Yu Chuxin reminded: Investors should make professional judgments in combination with the macroeconomic situation, not only to avoid speculative psychology, but also to respond to the impact of the "retreat" policy in advance. After the market interest rate has risen at the end of April, the early profit -making institutions have made a profit. For those who are not willing to "get off the car", and those who "get on the car" for the purpose of the bottom should be Essence

At the inter -bank coin market conference held in May 2020, Ma Jianyang, deputy director of the Central Bank Financial Market Department, also warned: "Although leverage is the mainstream profit method of the bond market, the volatility of the market will increase as the leverage rate increases. It is recommended that you learn the consequences caused by the rise in bond market volatility in 2016. "

In 2016, the bond market not only increased the on -site market, but also added the off -site market. The so -called out -of -field leverage, that is, institutions use structured products to fixed priority income, and inferior funds to obtain excess benefits between the price difference between asset income and priority costs.

In August 2016, the central bank restarted for 14 days of reverse repurchase to raise market interest rates and gradually disassembled leverage. "The short -term operation of the central bank makes it uncomfortable to add leverage." A large securities bond investment manager in Beijing recalled.

The leverage of the debt market has declined

Historically, the central bank has rarely reduced the countermeasures to below 10 billion yuan. The last time the inverse repurchase was reduced to less than 10 billion yuan in January 2021. After the impact of Yongmu's breach of contract in the early stage, the central bank's investment increased. In January 2021, the overnight repurchase interest rate was below 1%, the market increased sharply, and the inverse repurchase transaction volume reached a record high. It dropped to 5 billion and then to 2 billion, and then tightened the liquidity at the end of the month. The market was passively completed, and the bond market also adjusted significantly. From last week, the level of leverage in the bond market also declined. According to the calculation of Haitong Securities's solidarity team, the leverage ratio of the inter -bank bond market on July 8 was 108.7%, a decrease of more than 1 percentage point from 110.2%on July 1; One percentage point. The calculation method of this leverage is the amount of bond custody (bond custody volume -repurchase balance).

However, it is worth noting that the current market capital interest rates remain low. According to Wind data, after the central bank's continuous retraction of reverse repurchase operations, the DR001 and DR007 remained stable or even declined. On July 9, DR001 and DR007 hovered around 1.22%and 1.55%.

"Although the central bank's 6 -day shrinkage operation has not brought a comprehensive market interest rate, these extraordinary operations of the central bank have recently showed that the central bank is going in the direction of water collection, that is, the removal of the surplus liquidity in the market." The aforementioned the aforementioned. Investment manager of a large securities company in Beijing said.

The central bank had previously emphasized on multiple occasions that judging the gesture of monetary policy should focus on public market operating interest rates, MLF interest rates and other policy interest rates, as well as the overall operation of market interest rates (mainly DR007) for a period of time. And the number of public market operation scale and other quantitative indicators.

According to the analysis, liquidity can be recovered after 3 billion reverse repurchases last week, but if you continue to put on 3 billion inverse repurchases this week, the scale of liquidity net placement is actually 0, and there is no recycling liquidity. However, the central bank still conducts 3 billion reverse repurchase. The key is to release the 7 -day inverse repurchase policy interest rate of the 7 -day retreat, which has remained at a signal of 2.1%, implying that the current market interest rate deviations have more interest rates.

Zhong Linnan, a senior macro analyst of Guangfa Securities, said that the 3 billion inverse repurchase not only released the signal of low interest rates and non -excessive leverage, and smooth the rate and slope of market interest rate return to policy interest rates. The central bank is currently satisfied with the looseness of narrow liquidity. In the future, it may not take the initiative to promote market interest rates to further deviate from policy interest rates. Instead, it will naturally return market interest rates to policy interest rates under the force of credit expansion.

Yang Yewei believes that the current fundamentals and credit conditions do not support the central bank to tighten the liquidity sharply. At the same time, when the fiscal deposit continues to decline and the residents continue to return to the banking system liquidity, the liquidity will continue to be loose and still protect the bond market.

(Coordinating: Ma Chunyuan)

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