On June 12, the People's Bank of China issued an open market buyout reverse repurchase bidding announcement.The announcement shows that in order to maintain sufficient liquidity in the banking system, on June 15, 2026, the People's Bank of China will carry out a 600 billion yuan buyout reverse repurchase operation with a fixed quantity, interest rate bidding, and multiple price winning bids. The period is 6 months (183 days) and the expiration date is December 15, 2026 (extended in case of holidays).

Since the maturity scale of the 6-month buyout reverse repurchase in June is 600 billion yuan, the 6-month buyout reverse repurchase this month will be renewed in an equal amount, achieving zero investment and zero withdrawal.In addition, the People's Bank of China also launched a 500 billion yuan three-month buyout reverse repurchase operation on June 5, and achieved a net withdrawal of 300 billion yuan after hedging the expired 800 billion yuan three-month buyout reverse repurchase.

Dong Ximiao, chief economist of China Merchants Union and executive director of Shanghai Finance and Development Laboratory, said in an interview with a reporter from Securities Daily that the People's Bank of China has continued to guide market interest rates back to policy rates through shrinking operations on buyout reverse repurchases.For example, on June 5, a net withdrawal of 300 billion yuan from three-month buyout reverse repurchases was combined with a sharp drop in bank lending. Currently, DR007 has risen to a policy interest rate slightly higher than 1.4%, and the funding situation has gone from extremely abundant to accelerating convergence.

“The People’s Bank of China continued to do 6-month reverse repurchases in equal amounts on June 15, which is not a policy shift, but a flexible adjustment of ‘peak cutting and valley filling’.” Dong Ximiao said that on the one hand, the continuous shrinkage of buyout reverse repos has basically completed the policy goal of restricting idling of funds and stabilizing long-term interest rates; on the other hand, the 6-month buyout reverse repurchases continued in equal amounts to provide support for cross-season liquidity and avoid market overshooting caused by the continued withdrawal of medium and long-term funds.This operation is combined with the short-term investment of 7-day reverse repos to form a structural adjustment of "shortening the length and releasing the short", which not only maintains the stability of short-term interest rates, but also guides medium and long-term liquidity to remain sufficient.For the market, this operation helps stabilize bond and stock market expectations.

Judging from the recent 7-day reverse repurchase operations of the People's Bank of China, after the continuous "zero operations" of reverse repurchases on June 3 and June 4, the scale of reverse repurchase operations has remained at the level of 100 billion yuan since June 5.From June 5 to June 12, the People's Bank of China carried out a total of 1.327 billion yuan in reverse repurchase operations. During the same period, the maturity scale of reverse repurchases was 349.2 billion yuan, and the net investment after hedging was 977.8 billion yuan.

In Dong Ximiao's view, in the future, the moderately loose tone of monetary policy will remain unchanged, the supportive stance will remain unchanged, liquidity management will return to a more abundant range from the previous abnormally loose, and the capital interest rate center is expected to operate smoothly around the policy interest rate.