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 on January 8, it will conduct 110 billion yuan in outright reverse repurchase operations via a fixed-volume, fixed-rate, multiple-price auction, with a maturity of three months (90 days). Wang Qing, Chief Macro Analyst at Orient Credit Rating, believes that the decision not to increase the volume of the three-month outright reverse repo operations in January may be related to the maturity structure of financial institutions’ funding needs and does not indicate that the central bank is reducing its liquidity injection efforts. With 600 billion yuan in six-month outright reverse repos maturing in January, the central bank is expected to conduct another six-month outright reverse repo operation this month, and it is highly likely that the volume will be increased. This implies that the central bank will extend both maturity types of outright reverse repos with increased volumes in January, injecting medium-term liquidity into the market for the eighth consecutive month. With 200 billion yuan in MLF maturing in January, Wang Qing believes the central bank may also extend this facility with increased volumes. Overall, in January, the central bank will comprehensively utilize the two policy tools—outright reverse repurchase agreements and the MLF—to continue injecting medium-term liquidity into the market. This is a concrete manifestation of the monetary policy’s continued “moderately loose” stance in 2026 and the maintenance of ample liquidity. (Everyday Economic News)