According to Jinshi.com, the People's Bank of China conducted a 7-day reverse repurchase operation of 2 billion yuan and a medium-term lending facility (MLF) operation of 125 billion yuan on May 15 to maintain reasonable liquidity in the banking system, and the operating interest rates remained unchanged at 1.8% and 2.5% respectively. Wen Bin, chief economist of Minsheng Bank, said that from November to December, due to the low amount of treasury bonds maturing, liquidity pressure has become relatively large. At the same time, considering that the amount of MLF maturing in the last two months of this year is also the highest, the central bank may implement a reserve requirement ratio cut to protect liquidity and ease the pressure on the central bank to renew MLF. Combined with internal and external factors, the conditions for implementing interest rate cuts are gradually accumulating.
