On July 14, the People's Bank of China (hereinafter referred to as the "central bank") carried out a RMB226.2 billion reverse repurchase operation in the form of fixed interest rate and quantitative bidding, with the operating interest rate maintained at 1.4%. Given that 106.5 billion yuan of reverse repurchase expired on that day, the central bank achieved a net investment of 119.7 billion yuan in the open market. Reviewing the open market operations of the People's Bank of China since July, from July 1st to July 9th, the daily open market operations of the People's Bank of China have resulted in net withdrawal of funds, with a cumulative net withdrawal of 1796.3 billion yuan. Starting from July 10th, there was a shift towards net investment funds, with a net investment of 32.8 billion yuan on the same day and 50.7 billion yuan on July 11th. Wang Qing, Chief Macro Analyst of Dongfang Jincheng, told reporters that the net financing of government bonds increased significantly on July 11th. As the tax period approaches this month, market liquidity has tightened to a certain extent. In order to maintain sufficient market liquidity, the central bank's open market operations have shifted from net withdrawal to net release. In addition, on July 14th, the central bank also announced that in order to maintain sufficient liquidity in the banking system, a 1.4 trillion yuan buyout reverse repurchase operation will be carried out on July 15th through a fixed quantity, interest rate bidding, and multi price bidding method. Among them, the operation volume for a 3-month period is 800 billion yuan, and the operation volume for a 6-month period is 600 billion yuan. This is also the second time since June that the central bank has given advance notice of a buyout style reverse repurchase operation. Wang Qing believes that the central bank's shift from month end disclosure to mid month disclosure of buyout style reverse repurchase operations indicates an increase in transparency in monetary policy operations, further improvement of communication mechanisms, and helps stabilize market expectations. In July, a total of 1.2 trillion yuan of buyout reverse repos matured, with a 3-month maturity of 700 billion yuan and a 6-month maturity of 500 billion yuan. The central bank's 1.4 trillion yuan buyout reverse repurchase operation will result in a net investment of 200 billion yuan, marking the second consecutive month of volume increase. On the basis of releasing about 1 trillion yuan of long-term liquidity through the central bank's reserve requirement ratio cut in May, the central bank has continuously implemented net injections of buyout style reverse repurchase in the past two months. On the one hand, this helps to maintain sufficient liquidity in the banking system during the peak period of government bond issuance. On the other hand, it also signals the continued strengthening of quantitative monetary policy tools, which helps to strengthen countercyclical regulation. ”Wang Qing said. From the perspective of this week's capital disturbance factors, Tan Yi, Chief Fixed Income Analyst at Tianfeng Securities, analyzed that multiple disturbances such as tax period withdrawals, increased pressure on government bond supply, and MLF (Medium Term Lending Facility) withdrawals are approaching, which may temporarily amplify the capital pressure, and the market's demand for liquidity may increase. There will be two MLFs due this month, with a total maturity of 300 billion yuan, namely 100 billion yuan due on July 15th and 200 billion yuan due on July 25th. Wang Qing stated that currently, the central bank is comprehensively using buyout reverse repurchase and MLF to continuously inject medium-term liquidity into the market, which means that in the context of macroeconomic stability and strength in the first half of the year, monetary policy still adheres to a supportive stance. Focusing on effectively addressing the impact of external fluctuations on macroeconomic operations and promoting a moderate rebound in price levels, various policy tools have room for moderate easing in the second half of the year. (New Society)