On June 15, the people's Bank of China announced that in order to maintain the reasonable and abundant liquidity of the banking system, it carried out RMB 200billion medium-term lending facility (MLF) operation and RMB 10billion 7-day reverse repurchase operation on the same day, with operating interest rates of 2.85% and 2.1% respectively, unchanged from the previous period. In view of the expiration of the MLF operation of 200billion yuan this month, this MLF operation is a continuation of the same quantity and parity. "In June, MLF did not increase its production, mainly because the current market liquidity is still slightly higher than the reasonable level of abundance, so there is no need to increase its production." Wang Qing, chief Macro Analyst of Dongfang Jincheng, told the Securities Daily. From the perspective of Shanghai interbank offered rate (Shibor), according to the data of the Interbank Funding Center, although Shibor was flat or up in all terms on June 15, it was still at a low level. Among them, Shibor reported 1.413% overnight, and its 5-day average and 10 day average were 1.4102% and 1.419% respectively. Dr007 is also at a low level. As of 15:00 on June 15, the weighted average interest rate of dr007 was 1.6228%, far lower than the current 7-day reverse repurchase interest rate. These data fully show that the current market is reasonably abundant in liquidity, and the need to further increase liquidity is not high. In fact, with the support of a series of policies and measures, the capital interest rate has been running at a low level since the middle and late April. For example, in April, the central bank reduced the reserve requirement by 0.25 percentage points to release about 530billion yuan of long-term funds, and then successively launched 440billion yuan of refinancing tools, including 200billion yuan of scientific and technological innovation refinancing, 100billion yuan of traffic and logistics refinancing, 40billion yuan of special refinancing pilot for inclusive elderly care, and 100billion yuan of special refinancing line to support clean and efficient utilization of coal. From the perspective of external factors, under the pressure of high inflation in the United States, the market's expectations for the Federal Reserve's aggressive interest rate hike are also rising. Affected by this, US bond yields have soared recently, and the upside down of China US interest rate spread has widened. According to wind data and the data of the Ministry of finance, on June 14, the yield of 10-year US bonds was 3.43% and that of 10-year medium-term bonds was 2.77%. Mingming, chief economist of CITIC Securities, told the Securities Daily that the rising US inflation level in May was higher than expected again, which strengthened the market's more hawkish expectation of raising interest rates at the Federal Reserve's interest rate meeting this week. The US bond interest rate rose sharply, and the key period limit interest rate of China US Treasury bonds has been fully inverted, which to some extent restricted the domestic monetary policy volume and price easing space. The MLF operating interest rate has remained unchanged for five consecutive months since it was lowered from 2.95% to 2.85% in January this year. Wang Qing believes that the MLF interest rate remained unchanged in June, which means that the pricing basis of the loan market quotation interest rate (LPR) in that month has not changed. It is expected that the LPR over one year and five years in June will remain unchanged. "There is still room for the mortgage interest rate to decline in the third quarter. With a view to promoting the decline of the mortgage interest rate, in addition to continuing to guide the reduction of the five-year LPR quotation, it is not ruled out that the MLF interest rate may be reduced in the third quarter. However, considering the internal and external balance, there will be more room for the reduction of the MLF interest rate in the future." Wang Qing added. In Mingming's view, considering the external resistance under the differentiation of China US policy cycle, it is difficult to directly lower the MLF operating interest rate. The core to achieve the goal of "cost reduction" lies in the downlink of LPR, and its transmission path is not single. From the perspective of policy interest rate guidance path, LPR quotation is made by adding points to MLF, and the reduction of MLF interest rate will directly guide the reduction of LPR quotation; From the perspective of reducing the cost of bank liabilities, the reform of deposit interest rate quotation and other means have directly reduced the cost of bank liabilities and can also guide the downward trend of LPR quotation. The separate reduction of LPR over 5 years in May is an example of this path. (Xinhua News Agency)