According to the announcement of the People's Bank of China (hereinafter referred to as the "central bank"), in order to maintain sufficient liquidity in the banking system, on April 27th, the central bank will carry out a 400 billion yuan medium-term lending facility (MLF) operation through fixed quantity, interest rate bidding, and multi price bidding, with a term of one year. The data shows that 600 billion yuan of MLF expired in April, which means that the MLF was contracted and renewed for 200 billion yuan in April. This is the first contracted renewal after multiple months of volume increase. In addition, the total net repurchase of buyout style reverse repurchase products with two maturity periods of 3 months and 6 months in April was 400 billion yuan, indicating a net liquidity repurchase of 600 billion yuan in mid April, compared to a net repurchase scale of 250 billion yuan last month. Mid term liquidity experienced a net recovery for the second consecutive month in April, with a significant expansion in net recovery scale, consistent with recent continuous' volume 'operations in the public market, mainly due to the further evolution of market liquidity towards a more loose direction since early April. ”According to Wang Qing, Chief Macro Analyst of Dongfang Jincheng, the net injection of medium and long-term liquidity by the central bank from January to February this year has significantly increased compared to the same period last year. At the same time, due to the combined effects of relatively mild bank credit injection in the first quarter and a decrease in net financing of government bonds in March, the funding situation has further evolved towards a loose direction since early April. The MLF volume reduction operation is taking advantage of the situation, not actively tightening. ”Dong Ximiao, Chief Economist of China Merchants Union, believes that the central bank sends a signal to the market through buyout reverse repurchase and moderate reduction of MLF volume, guiding market interest rates to moderately repair from excessively low to policy rates, and preventing interest rates from deviating too much from policy targets. For subsequent operations, Wang Qing expects that the central bank's "water withdrawal" process will continue before the main market interest rates rise to near the policy rate, including continuous "land volume" operations in the open market, as well as net withdrawals from MLF and buyout reverse repurchase. After the main market interest rates rebound to near the policy rate, MLF and buyout reverse repurchase are expected to resume net investment. Looking ahead, the central bank will continue to adhere to a moderately loose policy tone, maintain reasonable and abundant market liquidity, but the use of policy tools will become more precise and diversified. The position of MLF as a mid-term liquidity management tool will gradually weaken, and the weight of tools such as buyout reverse repurchase will continue to increase. The market should comprehensively observe the liquidity injection formed by various combinations of monetary policy tools, as well as the changes in market interest rates. ”Dong Ximiao said. (Looking into the New Era)