Wang Qing of Orient Credit: The three-month fixed-term reverse repo was rolled over without an increase in volume, which may be related to the maturity structure of financial institutions’ funding needs, among other factors.

The central bank announced today that it will conduct a 90-day (3-month) outright reverse repurchase operation of 1.1 trillion yuan on January 8, using a fixed quantity, interest rate bidding, and multiple price allocation method. Wang Qing, Chief Macro Analyst at Golden Credit Rating, believes that the central bank's decision not to increase the volume of the 3-month outright reverse repurchase operation in January may be related to the term structure of financial institutions' funding needs and does not signify a reduction in liquidity provision. Another 600 billion yuan of 6-month outright reverse repurchases will mature in January. Wang Qing expects the central bank to conduct another 6-month outright reverse repurchase operation this month, likely with an increased volume. This means that the two term outright reverse repurchase operations in January will collectively continue to be rolled over with increased volume, injecting medium-term liquidity into the market for the eighth consecutive month. Additionally, 200 billion yuan of MLF will mature in January, and Wang Qing expects the central bank may also increase its rollover. Overall, the central bank will use a combination of outright reverse repurchases and MLF in January to continuously inject medium-term liquidity into the market. This is a concrete manifestation of the 2026 monetary policy continuing its "moderately loose" stance and maintaining ample liquidity. (National Business Daily)