SMM

After the People’s Bank of China overextended MLF (medium-term lending facility) and increased the amount of reverse repurchase on August 15, it continued to increase the amount of reverse repurchase and carried out 290 billion yuan of reverse repurchase operations on August 16. As 2 billion yuan of reverse repos expired on August 16, the open market achieved a net investment of 297 billion yuan. Experts said that the increase in reverse repurchase by the PBOC will effectively hedge the impact of factors such as the peak of the tax period and government bond issuance payments, and it is expected that the central bank will continue to flexibly use a variety of tools to carry out open market operations according to the changeable relationship between supply and demand as well as market interest rates and maintain reasonable and abundant liquidity in the banking system.