Wenbin: In April, there was a significant net injection of MLF, with a clear signal of stability.

Yesterday, the central bank announced a 600 billion yuan MLF operation. Wen Bin, chief economist at Minsheng Bank, stated that due to various factors such as the large taxation period, accelerated government bond issuance, and bank dividends, the funding situation in the next stage may face certain tightening pressures. A substantial net injection of MLF will help stabilize liquidity and send a positive signal. The MLF in April significantly exceeded the amount needed, fully meeting the demands of the banking system. This may have a certain downward effect on prices, improving the cost of bank liabilities. It can also bring MLF interest rates closer to market levels, aligning them with 1-year interbank deposit rates, thereby weakening their policy attributes and accelerating the process of interest rate marketization. However, interest rate cuts still face multiple internal and external constraints. Therefore, given the current relatively low market rates and the need to continue observing domestic and international developments, the use of policies such as reserve requirement cuts and interest rate cuts may still be relatively cautious. In this context, the central bank's increased injection of medium-term liquidity into the market through MLF can meet liquidity needs, send stable signals, and leave more policy space for the future.