CITIC Securities said that the future MLF shrinking mode will become the norm.

On October 25, Jinshi Data reported that on the 25th, the Central Bank issued a public market business announcement stating that the People’s Bank of China conducted a 700 billion yuan Medium-term Lending Facility (MLF) operation with a term of 1 year, with a maximum bid Intrerest Rate of 2.30% and a minimum bid Intrerest Rate of 1.90%, with a bid Intrerest Rate of 2.00%. Mingming, Chief Economist of CITIC Securities, stated that the Central Bank continues to reduce the length and shorten the length, and continues to drop MLF’s impact on the Liquidity market. This month, MLF net withdrawal was 89 billion yuan, and on the 25th, the Central Bank achieved a net injection of 184.2 billion yuan in reverse repurchase, achieving an overall net injection of 95.2 billion yuan. Behind the Central Bank’s operation of reducing the length and shortening the length, on the one hand, it continues to gradually dilute the impact of MLF tools on the Liquidity market, and on the other hand, it avoids the excessive impact of MLF volume reduction on the Liquidity market during the tax period and fund cross-month stage, and strengthens the guiding significance of reverse repurchase Intrerest Rate on market Intrerest Rate. Mingming predicts that the operation mode of public market oversupply and MLF volume reduction on the 25th of each month will become a normal state.