Liquidity in the mid-March period tightened up, industry insiders say it may be mainly due to the continued slightly ample state of funds in March.

On March 24, the central bank announced that in order to maintain ample liquidity in the banking system, it will conduct a 500 billion yuan MLF operation on the 25th with a term of 1 year. With 450 billion yuan of MLF maturing that month, the net injection after the operation will be 50 billion yuan, marking the 13th consecutive month of increase, although the size of the increase is smaller than the previous month's 300 billion yuan. In addition, the net withdrawal of net repurchase agreements for two term varieties in March totaled 300 billion yuan. When combined with the net injection of MLF, the net withdrawal of mid-term liquidity in March was 250 billion yuan. Wang Qing, chief macro analyst at Oriental Jin Cheng, said that the net withdrawal of mid-term liquidity in March was the first time since October 2024. This may be mainly due to the high net injection of mid-term liquidity in the first two months of the year, reaching 1.9 trillion yuan. Wang Qing also stated that in the short term, as external uncertainties sharply increase, domestic monetary policy is likely to focus on maintaining ample liquidity and stabilizing market expectations. The current policy focus may temporarily shift towards controlling excessive price increases, potentially delaying measures such as reserve requirement cuts or interest rate reductions.