The PBC suspended the open market operation for ninth consecutive trading days. On August 3, the People's Bank of China announced that the total liquidity of the banking system is at a relatively high level, and no open market operations will be carried out today. In view of the fact that no funds expired today, zero turnover was achieved on that day.
In the first week of August, liquidity was abundant, the People's Bank of China (PBOC) closed down its open market operations and recovered a total of 210 billion yuan. Next week, no repurchase or interim loan facility (MLF) expires. Only a 120 billion yuan treasury cash deposit will expire in August 8th.
Market interest rates have fallen back in the week. Yesterday, Shanghai Interbank Offered Rate (Shibor) continued to fall, overnight Shibor down 5.8 basis points to less than 2%, to 1.97%, close to the low in early July. Shibor went down to 3.056% in 3 months, the lowest since December 2016.
In August, there were relatively few factors of capital disruption, the seasonal characteristics of fiscal deposits were not obvious, and the changes of conventional factors such as foreign exchange accounts were relatively small. It is noteworthy that the large number of interbank certificates of deposit expired in August and the impact of local debt issuance on the market. At present, the market for policy expectations from "tight credit" to "stable credit", the sound monetary policy tone is also loosening on the margin, the industry is expected to open market operation in August will still be on the basis of "peeling peak filling valley" on the basis of ensuring a reasonable liquidity.