On the afternoon of February 2, the People's Bank of China issued a "announcement" stating that in order to maintain reasonable and sufficient liquidity in the banking system and stable operation of the money market during the special period of epidemic prevention and control, the People's Bank of China will launch a 1.2 trillion yuan disclosure on February 3, 2020. The market reverse repurchase operation invested funds to ensure sufficient liquidity supply, and the overall liquidity of the banking system was 900 billion yuan more than the same period last year.
“In the current special period of epidemic prevention and control, this move is conducive to maintaining adequate supply of market liquidity after the holiday, maintaining the smooth operation of money market interest rates, and stabilizing market expectations.” Huang Zhiling, chief economist of China Construction Bank, said that after the Spring Festival in previous years, due to The total amount of liquidity before the holiday is already relatively high, and in the spring, a large amount of cash is returned to the banking system to further increase liquidity, and the liquidity demand of the banking system declines, the central bank generally suspends open market reverse repurchase operations and expires through reverse repurchase Naturally withdraw liquidity. The central bank did not allow reverse repurchase to expire naturally after the holiday, but immediately launched reverse repurchase operations to net liquidity, mainly considering that there are more uncertain factors in the special period of the epidemic and market liquidity demand may increase. After the central bank carried out the above operations, the total liquidity was more than 900 billion yuan more than the same period last year. Huang Zhiling believes that post-holiday liquidity will remain at a more adequate level than in previous years, which reflects the determination of the central bank to adequately supply liquidity and operational flexibility, supporting financial institutions in epidemic prevention and control, serving the real economy, and maintaining financial markets Stability has delivered a "reassurance", which is conducive to stabilizing the expectations of financial institutions and boosting financial market confidence.
"Looking back at history, major emergencies lead to liquidity risks in financial markets, often from market participants’ expectations of the central bank’s monetary policy uncertainty. If the central bank issues clear policy intentions in a timely manner, market participants will make their own market judgments accordingly. Adjust your behavior to avoid market liquidity risks caused by simultaneous operations." Huang Zhiling believes that the People's Bank of China has issued an announcement in advance to respond to the impact of the novel coronavirus pneumonia epidemic on the financial market, conveying firm and powerful policy signals to the market. , Which helps to eliminate the market’s speculation about the uncertainty of monetary policy and its over-preparation, and it is conducive to the market to make rational judgments and avoid liquidity risks caused by group panic.
Huang Zhiling emphasized that the modern central bank not only plays a role as a bank, but also shoulders the mission of stabilizing the financial market. We believe that the People's Bank of China will fulfill its mission and have the ability to manage liquidity risks in the financial market. (Economic Daily reporter Chen Guojing)
editor in charge: Wei Shaopu
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