In December, the MLF continued to release net funds, analysts said that it is not ruled out that a reserve requirement ratio cut may be implemented in the first quarter.

On December 25th, the People's Bank of China will conduct a 400 billion yuan MLF operation with a fixed quantity, interest rate bidding, and multiple price winning methods, with a term of 1 year. Wind Information data shows that 300 billion yuan of MLFs will mature in December, so after conducting the 400 billion yuan MLF operation, the People's Bank of China will achieve a net injection of 100 billion yuan, marking the 10th consecutive month of increasing MLF operations by the People's Bank of China. In addition, the People's Bank of China will also conduct a net injection of 200 billion yuan through buy sell-back reverse repos this month. This means a net injection of 300 billion yuan in mid-term liquidity in December. According to the previous operations of the People's Bank of China, the net injection scale of buy sell-back reverse repos and MLFs in August to November was 600 billion yuan per month, which has been reduced by 300 billion yuan this month. In response, Wang Qing, Chief Macro Analyst at Everbright Securities, believes that this may be due to a decrease in the net financing scale of government bonds in December compared to the previous period; at the same time, it is not ruled out that the People's Bank of China will implement a large-scale long-term liquidity injection in the first quarter of 2026 through reserve requirement ratio cuts. Ming Ming, Chief Economist at CITIC Securities, stated that although the net injection scale has been reduced, the People's Bank of China's moderate accommodative stance towards liquidity has not changed. Considering the approaching year-end funding pressure, it is not ruled out that the People's Bank of China may increase its purchases of government bonds to hedge against possible seasonal liquidity fluctuations at the end of the month.