"Buy-back reverse repurchase of 900 billion yuan, experts: guiding funds are in a relatively stable and abundant state"

The central bank announcement stated that, in order to maintain liquidity in the banking system, the People's Bank of China will conduct 900 billion yuan of fixed-rate reverse repurchase operations on January 15, 2026, with a maturity of 6 months, using a fixed quantity, interest rate tender, and multiple price bid method. Wang Qing from the research and development department of Oriental Jincheng analyzed that the main reason behind this is to secure the funding needs of major projects in key areas, consolidate and expand the positive momentum of economic recovery. The new limit on local government debt for 2026 has been issued early, which means that there will be a certain scale of government bond issuance in January 2026. In addition, after the completion of the 500 billion yuan injection of new types of policy financial instruments in October 2025, it will continue to drive large-scale lending in January this year, amplifying the 'New Year's Day' effect of credit. All of these factors will to some extent tighten the liquidity in the money market. Therefore, in order to address potential liquidity tightening, the central bank will inject medium-term liquidity into the banking system through reverse repurchase operations, guiding the funding market to remain in a relatively stable and adequate state.