After nearly four months, the central bank has restarted the 14 day reverse repurchase operation to "safeguard" market liquidity before the Spring Festival. On January 21st, the central bank released 256 billion yuan of 14 day reverse repo through fixed rate bidding, with a net investment of 201 billion yuan and an operating interest rate of 1.65%. Analysts believe that this move aims to alleviate liquidity pressure before the Spring Festival, stabilize market expectations, and ensure a smooth transition of funds. Meanwhile, the market generally believes that with the weakening of tax period disturbances, the tight financial situation is expected to gradually ease. On January 21, the People's Bank of China announced that in order to maintain sufficient liquidity before the Spring Festival, a 14 day reverse repurchase operation worth 256 billion yuan was carried out through fixed interest rate and quantity bidding, with an operating interest rate of 1.65%. Due to the expiration of 55 billion yuan of reverse repurchase on that day, the public market achieved a net investment of 201 billion yuan. According to the reporter's inquiry, the previous 14 day reverse repurchase operation conducted by the central bank was on September 23, 2024. The 14 day reverse repo operation is considered a short-term liquidity management tool, and its term design is of significant importance at specific points in time. On the eve of the Spring Festival, the central bank released funds through a 14 day reverse repurchase operation, aiming to meet the market's funding needs before the holiday and ensure that financial institutions can smoothly cross holidays. This operation not only helps stabilize market expectations, but also effectively alleviates the tight financial situation caused by the Spring Festival holiday. The restart of the 14 day reverse repo operation this time is a routine operation of the central bank. Although the amount of investment is not large, the subsequent amount of investment remains to be seen, but it also shows the determination of the central bank to maintain a stable and efficient funding situation A bond trader said. Under the background of the central bank's cross departmental care for liquidity, the pressure of capital convergence or gradual easing will be alleviated. The interviewee believes that although the funding situation will not significantly ease, there is no need to worry excessively. The equilibrium of the liquidity market is a major prerequisite for supporting economic recovery and fiscal efforts. Tan Yiming, Chief Fixed Income Analyst at Minsheng Securities, stated that on the one hand, under a supportive monetary policy stance, a stable and balanced liquidity remains a major prerequisite; On the other hand, with the gradual increase in government bond issuance and the greater financial pressure on the debt side of large banks, the central bank may need to increase its investment to provide protection. Coupled with the approaching Spring Festival in history, there is usually pressure to converge the funding situation, and the central bank often increases its investment to hedge it. Due to factors such as the tax period disturbance having passed, the most tight financial situation in recent times may have already passed. Xiao Jinchuan, a fixed income analyst at Huaxi Securities, believes that based on previous years' experience, the central bank generally starts the capital injection mode before the Spring Festival, and the degree of capital shortage may gradually ease. Zhongchengxin International believes that the disturbance caused by the tax period starting this week on the capital side will gradually subside. Although the central bank has been relatively restrained in its recent operations, monetary policy cooperation is still needed before issuing government bonds. The central bank may moderately increase its operational intensity in the future. In addition, after the transformation of the monetary policy framework, the central bank's buyout style reverse repurchase operation will be announced at the end of the month. Against the backdrop of continued tight funding, the central bank may have taken corresponding measures to protect the long-term financial situation. (New Society)