The central bank launched a 1 trillion yuan reverse repurchase operation today. Experts say there is a possibility of second operation within the month to achieve "increased quantity and continuation".

"On September 5th, 1 trillion yuan of 3-month reverse repurchase agreements are due to mature. The People's Bank of China conducted a 1 trillion yuan reverse repurchase operation, which is equivalent to a rollover of the same amount," said Wang Qing, chief macro analyst at Orient Securities, to Shanghai Securities News reporters. Due to factors such as government bond issuances and maturing certificates of deposit, the current market liquidity is showing signs of tightening. "Recently, overall market liquidity has been stable, but there is an expectation of a tightening of short-term funding," said Dong Ximiao, chief researcher at Zhonglian and deputy director of the Shanghai Financial and Development Laboratory, in an interview with Shanghai Securities News. Wang Qing explained that this is mainly because government bond issuance in September remains at a peak, and interbank certificates of deposit maturing in the same month amount to 3.5 trillion yuan, the second-highest level this year. Many industry experts believe that the People's Bank of China will continue with increased reverse repurchase operations in September. Ming Ming, chief economist at CITIC Securities, told Shanghai Securities News that in order to maintain ample liquidity, the People's Bank may continue with the net injections of reverse repurchase agreements that have been ongoing since June this year. In addition, there will be 300 billion yuan of 6-month reverse repurchase agreements maturing this month. Industry experts predict that the central bank will conduct one 6-month reverse repurchase operation this month to address the tightening liquidity situation. "The possibility of further extending the 6-month reverse repurchase agreements cannot be ruled out," said Ming Ming. Furthermore, there will be 300 billion yuan of medium-term lending facility (MLF) maturing in September. Industry experts believe that the MLF operations may continue with a slight net injection as before. Wang Qing mentioned that the central bank may increase the MLF operations and continue to inject medium-term liquidity into the market using a combination of MLF and reverse repurchase agreements.