On July 23, the central bank issued the July 2026 Mid-Term Loan Facilitation Tender Notice, stating that in order to maintain abundant liquidity in the banking system, on July 24, 2026, the People's Bank of China will launch a 500 billion yuan MLF operation using fixed amounts, interest rate tenders, and multiple price bid wins for a period of 1 year. “MLF expires 400 billion yuan in the same month, and this operation will achieve 100 billion yuan in liquidity investment.” The chief economist of CITIC Securities clearly analyzed it. In addition, the net investment for the June buyout reverse repurchase of the month was 500 billion yuan, while the net investment for the March buyout reverse repurchase was 200 billion yuan. Combined with MLF's net investment of 100 billion yuan, up to now, 800 billion yuan of medium-term liquidity investment has been achieved this month. Wang Qing, chief macro analyst at Dongfang Jincheng, mentioned that in July, MLF's renewal increased by 100 billion yuan. In order to increase the number for the third month in a row, the scale of the increase was reduced by 100 billion yuan compared to the previous month, which is basically in line with market expectations. Considering the increase of 700 billion yuan in buyout reverse repurchases of the two types of maturity in July, this means that the central bank's medium-term liquidity operations increased by a total of 800 billion yuan in that month, reversing the previous four-month continuous contraction trend, and the three medium-term liquidity instruments fully resumed net investment in July. “This move is mainly to hedge the funding gap caused by factors such as the accelerated issuance of government bonds in the third quarter, rising demand for capital across months, and tax period disturbances, to effectively maintain reasonable and abundant liquidity in the banking system and maintain the smooth operation of the financial market.” CMB chief economist Dong Ximiao explained.
Zhitongcaijing · 1d ago
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On July 23, the central bank issued the July 2026 Mid-Term Loan Facilitation Tender Notice, stating that in order to maintain abundant liquidity in the banking system, on July 24, 2026, the People's Bank of China will launch a 500 billion yuan MLF operation using fixed amounts, interest rate tenders, and multiple price bid wins for a period of 1 year. “MLF expires 400 billion yuan in the same month, and this operation will achieve 100 billion yuan in liquidity investment.” The chief economist of CITIC Securities clearly analyzed it. In addition, the net investment for the June buyout reverse repurchase of the month was 500 billion yuan, while the net investment for the March buyout reverse repurchase was 200 billion yuan. Combined with MLF's net investment of 100 billion yuan, up to now, 800 billion yuan of medium-term liquidity investment has been achieved this month. Wang Qing, chief macro analyst at Dongfang Jincheng, mentioned that in July, MLF's renewal increased by 100 billion yuan. In order to increase the number for the third month in a row, the scale of the increase was reduced by 100 billion yuan compared to the previous month, which is basically in line with market expectations. Considering the increase of 700 billion yuan in buyout reverse repurchases of the two types of maturity in July, this means that the central bank's medium-term liquidity operations increased by a total of 800 billion yuan in that month, reversing the previous four-month continuous contraction trend, and the three medium-term liquidity instruments fully resumed net investment in July. “This move is mainly to hedge the funding gap caused by factors such as the accelerated issuance of government bonds in the third quarter, rising demand for capital across months, and tax period disturbances, to effectively maintain reasonable and abundant liquidity in the banking system and maintain the smooth operation of the financial market.” CMB chief economist Dong Ximiao explained.
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