Securities Times reporter Sun Lulu
The People’s Bank of China recently announced the launch of reverse purchase repurchase operations in the open market, marking another enrichment of the central bank’s liquidity management tools. Since the beginning of this year, the central bank’s monetary policy toolbox has undergone a series of major changes, whether it is changing the application methods of original open market operating tools such as 7-day reverse repurchase and facilities medium term loan, or adding. purchases and sales of new government bonds and temporary overnight positive repos and reverse repos, as well as the latest reverse purchase style repos These reforms are beneficial to smooth the rate transmission mechanism and further improve the accuracy and control of the central bank on liquidity control.
Strengthening the central bank’s liquidity adjustment capabilities does not mean strengthening its “visible hand” control over financial market liquidity. On the other hand, it can be seen from the series of reforms in the monetary policy framework in recent months that the central bank intends to strengthen the guiding role of policy interest rates as an “anchor” for market money and enrich supply tools liquidity with diversity Better adapt to the diverse needs of financial institutions for liquidity in terms of terms, prices, and trading methods.
Taking the newly established buyback as an example, its term is expected to cover 3 months, 6 months, etc., filling the gap in the absence of 1-month instruments to 1-year among liquidity investment vehicles. From the perspective of pricing methods, fixed volume, interest rate bids, and bids that win multiple prices are used, institutions can choose bids with different interest rates based on their own capital needs. The winning bidder’s prices are his own bid interest rate, which places higher demands on the institution’s asset pricing capabilities. If the bid is too low, you may not be able to win the bid If the bid is too high, you may win the bid, but you will have to bear higher costs there will be full competition in interest rates for better find out the true value of money. By receiving feedback on differential prices, the central bank will gain a more accurate understanding of the market’s perception of asset prices.
From the point of view of trading methods, unlike a committed repurchase, a purchase repurchase involves the transfer of bond ownership during the trading process. re-enter the market or use it for other activities such as buying and selling financial bonds, swap facilities, etc. By moving bond ownership off-balance sheet for a certain period of time in exchange for liquidity, financial institutions can strengthen their means to meet the requirements of liquidity management indicators.
Whether it is adding new buyout-type repos or starting the buying and selling of financial bonds, the central bank’s continued enrichment of open market tools this year is on marketing, regulatory and internationalization. to clarify, and it is also a reflection of acceleration. the development of the modern central banking system. As the “bank of banks”, the central bank conducts financial transactions with financial institutions through open market operations to provide liquidity to the financial market of liquidity to financial institutions The range of market-oriented options will increase pricing capabilities or – independent and reasonable financial institutions. Only by allowing policies to feed back to policies and markets to markets, with each fulfilling its own roles and complementing each other, will it be most conducive to improving the efficiency of capital deployment and a sound monetary and create finance for sustainable economic growth and structural change. .
(Editor: Wen Jing)
2024-10-31 03:03:00
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