The central bank will conduct 700 billion yuan repurchase operations in August, and the intensity of liquidity injection is expected to continue to increase.

The People's Bank of China announced that it will conduct 700 billion yuan 3-month reverse repurchase operations on August 8th. Industry insiders believe that this operation may be aimed at smoothing out the peak of fiscal tax payments and pre-hedging end-of-quarter liquidity pressure. It is expected that the central bank will continue to use various monetary policy tools such as reverse repurchase agreements, reverse repurchase agreements, and medium-term lending facilities to strengthen regulation of short- to medium-term liquidity, maintain adequate liquidity, and further implement a moderately loose monetary policy. It is not ruled out that the central bank may inject long-term liquidity into the market through timely reserve requirement ratio cuts in the second half of the year.