On October 27th, it was announced that the central bank conducted a 7-day reverse repurchase operation worth 337.3 billion yuan through fixed interest rate and quantity bidding, with an operating interest rate of 1.4%. At the same time, the People's Bank of China recently announced that it will launch a 900 billion yuan MLF (Medium Term Lending Facility) operation on October 27th through a fixed quantity, interest rate bidding, and multi price bidding method, with a term of one year. Given that there were 700 billion yuan of 1-year MLF and 189 billion yuan of 7-day reverse repurchase due on that day, a net investment of 348.3 billion yuan was realized. Wen Bin, Chief Economist of Minsheng Bank, stated in an interview with reporters that due to the expiration of 700 billion yuan of MLF in October, the net investment of MLF has reached 200 billion yuan, which is the eighth consecutive month of volume increase and continuation. Considering that the central bank also released a net injection of 400 billion yuan through buyout reverse repurchase in October, it means that the total net injection of liquidity in the middle of this month is 600 billion yuan, which is the same as September. The net injection scale continues to be at a high level, further demonstrating the moderately loose monetary policy orientation. The Chief Economist of CITIC Securities, Mingming, stated that based on the overall deployment of various liquidity tools in October, the central bank's attitude towards maintaining sufficient liquidity is clear against the backdrop of simultaneous efforts in both long and short end liquidity tools, and the cost of both long and short end liquidity remains stable. The central bank's maintenance of protective investment is expected to alleviate financial pressure and reduce fund fluctuations to a certain extent. ”Wen Bin believes that maintaining a wide range of liquidity in the central bank's long end is also due to the coordination of government bond issuance and the strengthening of the synergy between monetary and fiscal policies. Although the peak period of government bond issuance has passed, considering that the Ministry of Finance further arranged a 500 billion yuan local government debt balance limit in October to resolve existing debt and expand effective investment, it is expected that the net financing of government bonds in October will still reach a scale of trillions of yuan. The current regulatory authorities are also guiding financial institutions to stabilize their credit allocation efforts, especially accelerating the promotion of 500 billion yuan of new policy financial instruments since the end of September, and will concentrate on completing the allocation in October, driving the release of supporting financing demand. ”Wen Bin stated that according to the minimum ratio of project capital to total investment of 20% and the ratio of policy financial instruments to total capital of 50%, the 500 billion yuan financial instruments will leverage about 5 trillion yuan of effective investment, and it is expected to create a demand for matching loans of 2 trillion yuan to 2.5 trillion yuan. To this end, the central bank continues to inject medium-term liquidity, which can alleviate the pressure on banks' debt side and expand the space for credit injection. Looking ahead to the future, Wen Bin stated that buyout reverse repurchase and MLF have significant maturity volumes in the fourth quarter of this year and January of next year, reaching 5.6 trillion yuan and 1.9 trillion yuan respectively; At the same time, the central bank purchased a total of 1 trillion yuan of bonds from August to December last year, and as of the end of September this year, the cumulative maturity is about 757.5 billion yuan (nearly 76%). In this context, it is not ruled out that the central bank may adopt measures such as reserve requirement ratio cuts or bond purchases in the fourth quarter to deeply release liquidity. Before the end of the year, market liquidity will continue to be in a relatively stable and abundant state, and there is not much room for market interest rates to rise. (New Society)