In order to maintain sufficient liquidity in the banking system, the People's Bank of China launched a 450 billion yuan medium-term lending facility (MLF) operation on March 25, with a term of one year. Considering the expiration of MLF of 387 billion yuan in the current month, a net MLF investment of 63 billion yuan was achieved in March, marking the first net MLF investment since July 2024. In March, MLF continued to operate beyond the limit, and for the first time since July last year, MLF turned into net injection, sending a signal that the central bank is nurturing liquidity and demonstrating a moderately loose monetary policy orientation. In the next stage, in order to stabilize growth, broaden credit, and stabilize expectations, the monetary policy target is expected to shift towards multi-objective balance, while also taking into account short-term liquidity. The tight balance of funds is expected to be adjusted Wen Bin, Chief Economist of China Minsheng Bank, pointed out. Since the central bank launched buyout style reverse repurchase in October last year, the balance of buyout style reverse repurchase has gradually increased, reducing the pressure on MLF to inject medium - and long-term liquidity. MLF continues to shrink in volume, and the balance has gradually decreased from a peak of 7.3 trillion yuan to about 4 trillion yuan. Since the beginning of this year, the central bank has continued to use various tools to inject liquidity. From January to February this year, the total net injection of buyout reverse repurchase and MLF exceeded 1.3 trillion yuan, maintaining sufficient liquidity and stable operation of money market interest rates. Market experts generally believe that in the future, the central bank will continue to inject liquidity through various tools such as buyout reverse repurchase to maintain reasonable and sufficient liquidity. It is worth noting that with the change of MLF to multi price bidding this month, there is no longer a unified bidding rate, and the policy attribute of MLF interest rate has completely withdrawn. Authoritative experts point out that after adopting multiple price points for bidding, the overall cost of MLF funds will decrease, which is conducive to reducing bank debt costs and enhancing the sustainability of financial support for the real economy. At present, the central bank has a rich liquidity toolbox and a more reasonable term distribution. In the long term, there are reserve ratio reduction and treasury bond bond trading; in the medium term, there are MLF, buyout reverse repo operations and various structural instruments; in the short term, there are open market 7-day reverse repo, temporary overnight positive and reverse repo. In the future, the central bank's liquidity management will be more efficient and precise, and the intensity and pace of regulation will be more scientific and flexible, which can better balance multiple objectives. The Chief Economist of CITIC Securities clearly stated that MLF has returned to its position as a conventional liquidity tool, and in the future, buyout style reverse repurchase may still be the main supply channel for medium - and long-term liquidity. From a price perspective, MLF will completely remove its policy interest rate attribute after winning the bid at multiple price points, and may maintain its position as the main policy interest rate for the next 7 days through reverse repurchase rate; In terms of quantity, although MLF achieved net investment this month, the central bank may continue to gradually withdraw from MLF in the future, and buyout style reverse repurchase tools may assume the supply position of medium and long-term liquidity. (New Society)