The People's Bank of China conducted its first medium-term lending facility operation of the year, injecting a net of 700 billion yuan today.

On January 22, the People's Bank of China announced that in order to maintain ample liquidity in the banking system, a 900 billion yuan medium-term lending facility operation will be conducted on January 23 using a fixed amount, fixed rate tender, and multiple price bids, with a term of 1 year. "The net injection scale of this operation is significantly increased." Wang Qing, Chief Macroeconomic Analyst at Orient Securities, told reporters that the net injection of buy-back-style reverse repurchase agreements for two terms in January amounted to 300 billion yuan, and the total net injection of medium-term liquidity in January was as high as 1 trillion yuan, significantly larger than before. "Considering the approach of the Spring Festival, the increase in the net injection of liquidity by the central bank is an important means to stabilize market liquidity." Ming Ming, Chief Economist at CITIC Securities, told the Shanghai Securities News. Dong Ximiao, Chief Researcher at Zhonglian Securities, told the Shanghai Securities News that this operation continues to inject medium-term liquidity into the market to meet the cross-holiday funding needs before and after the Spring Festival, mitigate the disturbances to market liquidity caused by the early credit extension at the beginning of the year, faster issuance of government bonds, and further improve the term structure of market liquidity. Wang Qing stated that the significant increase in the injection of medium-term liquidity by the central bank is mainly to address the potential tightening of liquidity: to ensure funding for major projects in key areas, the quota for new local government debt in 2026 has been advanced, there was a certain scale of government bond issuance in January, in addition to the "new year credit blast" effect, and with the approaching of the Spring Festival, the seasonal increase in the scale of residents' cash withdrawals could all lead to a tightening of liquidity.