Group 1 - The People's Bank of China conducted a 1,875 billion yuan 7-day reverse repurchase operation on July 18, maintaining an interest rate of 1.40%, resulting in a net injection of 1,028 billion yuan after 847 billion yuan of reverse repos matured on the same day [1] - For the week, the People's Bank of China executed a total of 17,268 billion yuan in 7-day reverse repos, leading to a total net injection of 12,011 billion yuan after accounting for 4,257 billion yuan in reverse repos and 1,000 billion yuan in 1-year MLF maturing [1] - The Shanghai Interbank Offered Rate (Shibor) remained stable, with the overnight Shibor decreasing by 0.10 basis points to 1.4620%, and the 7-day Shibor down by 1.00 basis points to 1.4940% [1] Group 2 - The overnight funding rate in the interbank pledged repo market fell below 1.5%, while the 14-day funding rate saw a slight increase. The weighted average rates for DR001 and R001 decreased by 0.7 basis points and 2.4 basis points, respectively, with transaction volumes dropping significantly [1] - The overall funding environment on July 18 was balanced and slightly loose, with overnight rates stabilizing around 1.48%-1.50% and 7-day rates remaining stable [10] - A total of 169 interbank certificates of deposit were issued on July 18, with an actual issuance volume of 2,617.7 billion yuan, reflecting active trading sentiment in the primary market [11] Group 3 - The Financial Regulatory Administration held a meeting emphasizing the need to advance the reform of small and medium financial institutions and effectively prevent and resolve key area risks [14] - The People's Bank of China is soliciting opinions on the "Interbank Market Brokerage Business Management Measures (Draft for Comments)," which includes 26 articles focusing on the types and scope of brokerage institutions and risk isolation requirements [14] - The People's Bank of China is also seeking feedback on the draft supervision and management measures for financial institutions regarding anti-money laundering and anti-terrorist financing, detailing regulatory responsibilities and requirements [14]

Core Viewpoint - The People's Bank of China (PBOC) conducted a 1.875 trillion yuan reverse repurchase operation with a rate of 1.40%, maintaining the previous level [1] Group 1 - On the same day, 847 billion yuan of reverse repos matured [1] - Throughout the week, the PBOC executed a total of 1.7268 trillion yuan in 7-day reverse repos [1] - This week saw 4.257 trillion yuan in 7-day reverse repos and 1 trillion yuan in 1-year Medium-term Lending Facility (MLF) maturing [1] Group 2 - The net injection for the week amounted to 1.2011 trillion yuan [1]

Report Industry Investment Rating - No relevant information provided Core Viewpoints of the Report - The market has a consistent expectation that the Fed will not cut interest rates in July, and the short - term US Treasury yields are stable. After the end of the quarter, the domestic money market will loosen, and the central bank's attitude to maintain a loose liquidity is clear. It is expected that the domestic money market interest rates will decline seasonally in July [2][3][10] Summary by Relevant Catalogs Overseas Key Money Market Indicator Changes Tracking - Since June, the 3 - month US Treasury yield has been stable, and the market has a consistent expectation that the Fed will not cut interest rates in July. The US federal funds rate and SOFR rate have been running smoothly [2][6] - As of 2025, the policy target rate (base money) in Japan is 0.5%, the eurozone's benchmark interest rate (main refinancing rate) is 2.15%, and the US federal funds target rate range is 4.25 - 4.50% [8] Domestic Key Money Market Indicator Changes Tracking Price Indicators - In June, as the quarter - end approached, the money price increased, and most of the average exchange repurchase rates rose. The monthly average values of R001, GC001, R007, and GC007 changed by - 6BP, 13BP, 2BP, and 4BP respectively [2][11][13] - The monthly average yields of 1 - year short - term bonds mostly declined. The monthly average yields of 1 - year Treasury bonds, 1 - year government - backed bonds, 1 - year AAA commercial paper, 1 - year AA commercial paper, 1 - year AA - commercial paper, 1 - year AAA negotiable certificates of deposit, and 1 - year AA+ negotiable certificates of deposit changed by - 6BP, - 1BP, 1BP, - 2BP, - 15BP, - 3BP, and - 3BP respectively [13][32] - The monthly average values of DR001 and DR007 in June both decreased slightly, with changes of - 11BP and - 2BP respectively compared to the previous month. The average 1 - day and 7 - day spreads between R and DR changed by 5BP and 4BP respectively compared to the previous month [18] - The average monthly interest rate of negotiable certificates of deposit decreased slightly in June. The interest rate of 1 - year high - grade and low - grade negotiable certificates of deposit both decreased by 3BP. The interest rate of negotiable certificates of deposit was higher than the 7 - day reverse repurchase rate, and the interest rate spread narrowed [27] - The 7 - day annualized yield of money funds decreased. The 7 - day average annualized yield of Yu'E Bao in June decreased slightly to 1.18%. The average 7 - day annualized yields of Yu'E Bao and the top ten money funds changed by - 8BP and - 4BP respectively compared to the previous month [33] Quantity Indicators - In June, the overnight trading volume and proportion in the inter - bank market both increased compared to the previous month, while those in the exchange market both decreased. The average daily trading volume of R001 in the inter - bank market in June was 6.82 trillion, accounting for 87.6%, and the trading volume and proportion of GC001 in the exchange market were 1.88 trillion and 86.6% respectively [38] - In June, the central bank actively injected liquidity, and the excess deposit reserve ratio increased compared to the previous month. The central bank injected 14,000 billion in outright reverse repurchases in two installments, with a net injection of 2000 billion. It also injected 5,539 billion in liquidity through open - market operations. Fiscal expenditures increased at the end of the quarter, and fiscal deposits decreased by 8,166 billion. The estimated excess deposit reserve ratio in June was 1.5% [42] - The year - on - year monthly average of the balance of bonds to be repurchased in the inter - bank and exchange markets increased compared to the previous month. The year - on - year balance of bonds to be repurchased in the inter - bank market in June increased by 10%, while that in the exchange market decreased by 3% [45] - The volatility index of the exchange overnight repurchase rate mostly increased slightly compared to the previous month. As of the end of June, V(R001) = 0.27, V(R007) = 0.28, V(GC001) = 0.34, and V(GC007) = 0.26 [49] Money Outlook Five - Channel Prediction - **M0**: In June, M0 increased seasonally by 569 billion. It is estimated that M0 will increase by 600 billion in July [56] - **Required Deposit Reserves**: In June, RMB loans increased significantly month - on - month, and financial institution deposits increased by 32,100 billion. It is expected that deposits will decrease by 4,000 billion in July, resulting in a decrease of 248 billion in required deposit reserves [57] - **Fiscal Deposits**: In June, the issuance of special Treasury bonds declined, and government expenditures at the half - year - end increased, resulting in a decrease of 8,166 billion in fiscal deposits. In July, the issuance of ultra - long - term special Treasury bonds will continue as planned, and the issuance of special refinancing bonds will slow down. It is expected that fiscal deposits will increase seasonally by 6,000 billion [60] - **Foreign Exchange Occupation**: Due to the suspension of Sino - US tariff negotiations and the impact on imports and exports, it is expected that foreign exchange occupation will decrease by 700 billion in July [65] - **Open Market Operations**: The central bank's attitude to maintain a stable and loose liquidity is clear. It is expected that the central bank will conduct net injections to maintain a loose money market. It is estimated that the central bank will conduct net injections of 4,000 billion through open - market operations and outright reverse repurchases in July. After comprehensively considering the five - channel changes, the estimated excess deposit reserve ratio in July is 1.3% [72] Main Conclusion - After the end of the quarter, the money market will loosen, and it is expected that the money market interest rates will decline seasonally in July. Historical data shows that in recent years, the volatility of the money market has decreased, and the inter - bank overnight repurchase rates mostly decline in July. The average monthly change of R001 in July in the past five years was - 9BP, and that of R007 was - 11BP [73][76]

Core Viewpoint - The Federal Reserve's Musalem indicated that not paying interest on reserves will necessitate more aggressive open market operations to manage liquidity [1] Group 1 - The Federal Reserve is considering the implications of not paying interest on reserves [1] - More active open market operations may be required to control liquidity in the financial system [1]

Core Viewpoint - The central bank conducted a net withdrawal of 62 billion yuan today through reverse repurchase operations, indicating a tightening of liquidity in the market [1] Group 1 - The central bank executed a 69 billion yuan reverse repurchase operation with a 7-day maturity [1] - A total of 131 billion yuan in 7-day reverse repos matured today [1] - The net withdrawal of 62 billion yuan reflects the difference between the reverse repurchase operations and the maturing repos [1]

Core Points - The central bank conducted a 340 billion yuan 7-day reverse repurchase operation on July 4, indicating active liquidity management in the market [1] - A total of 5,259 billion yuan in 7-day reverse repos matured on the same day, leading to a net withdrawal of 4,919 billion yuan [1] Summary by Category - **Monetary Policy Actions** - The central bank's reverse repurchase operation of 340 billion yuan reflects its strategy to manage short-term liquidity in the financial system [1] - **Market Liquidity** - The maturity of 5,259 billion yuan in reverse repos highlights significant liquidity dynamics, resulting in a net withdrawal of 4,919 billion yuan, which may impact market interest rates and liquidity conditions [1]

Group 1 - The People's Bank of China conducted a 340 billion yuan reverse repurchase operation today, maintaining the operation rate at 1.40% [1] - A total of 525.9 billion yuan in reverse repos matured today [1]

Core Viewpoint - The People's Bank of China did not conduct any open market treasury transactions in June, but executed a reverse repurchase operation amounting to 1.4 trillion yuan [1] Group 1 - The central bank's decision to refrain from open market treasury transactions indicates a cautious approach to monetary policy in June [1] - The 1.4 trillion yuan reverse repurchase operation suggests an effort to manage liquidity in the financial system [1]

1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - The main tone of "moderately loose monetary policy" remains unchanged, and stabilizing growth is still the central bank's primary short - term goal. If economic growth shows no improvement and faces more pressure, a new round of broad monetary policy may be launched [1]. - In July, the large - scale supply of government bonds and tax - payment factors will significantly interfere with the capital market. However, the central bank's support for the capital market is expected to continue, with overnight and 7 - day capital interest rates likely to remain stable [1]. - The supply - demand structure of inter - bank certificates of deposit (CDs) will further improve in July, with the maturity scale of CDs decreasing and the interest rate having room to decline [1]. 3. Summary by Directory 3.1 Current Situation and Future Concerns - From June 23 to June 27, the central bank made substantial net injections to support cross - quarter liquidity, leading to a divergence in capital prices. Overnight capital interest rates were stable, while 7 - day rates rose significantly, and the liquidity stratification phenomenon was obvious [5]. - The second - quarter monetary policy committee meeting changed the wording, but it doesn't rule out the possibility of broad monetary policy in the third quarter. If the economy doesn't improve, new policies may be introduced [5]. - In July, large government bond supply and tax - payment factors will affect the capital market, but the central bank's support is expected to continue. The overnight capital interest rate may fluctuate around the policy rate, and the 7 - day rate may return to around 1.5% [6]. - It is estimated that in July 2025, government bond issuance will be 2.61 - 2.86 trillion yuan, with net financing of 1.45 - 1.70 trillion yuan, slightly higher than in June. The supply of ultra - long - term special treasury bonds may increase, and new local government special bonds are expected to be the main type in the third quarter [6]. - In July, MLF and buy - out repurchase maturities total 1.5 trillion yuan, more than in June. The central bank's operation method has enhanced its control over medium - and long - term liquidity [10]. - Thanks to the central bank's support, in June, CDs maintained high - volume issuance with stable or decreasing prices. In July, the supply - demand structure of CDs will improve, and the interest rate has room to decline [10]. 3.2 Money Market Interest Rate Tracking - From June 23 to June 27, overnight capital interest rates were stable (DR001 around 1.37%, R001 between 1.44% - 1.46%), while 7 - day rates rose (DR007 from 1.51% to 1.70%, R007 from 1.56% to 1.92%), and the liquidity stratification was obvious [13]. - During this period, the bank's capital lending scale increased, the money fund's lending scale decreased, and the bond market leverage ratio continued to rise [17]. - From June 23 to June 27, bill interest rates first decreased and then increased, with the 3M national - share discount rate and half - year national - share transfer discount rate showing corresponding changes [22]. 3.3 Open Market Operation Tracking - As of June 27, the central bank's total balance of open - market operations was 1168.85 billion yuan, including 202.75 billion yuan in pledged repurchase, 480 billion yuan in buy - out repurchase, and 515 billion yuan in MLF [23]. - From June 23 to June 27, the central bank's net injection in open - market operations was 126.72 billion yuan, with 106.72 billion yuan in pledged repurchase. In June, buy - out repurchase and MLF maturities and net injections were as expected. From June 30 to July 4, pledged repurchase maturities reached 202.75 billion yuan [27]. 3.4 Government Bond Tracking 3.4.1 Government Bond Issuance - From June 23 to June 27, treasury bond issuance was 11.1 billion yuan, and net financing was 11.1 billion yuan; local bond issuance was 64.164 billion yuan, with net financing of 56.0393 billion yuan [33]. - It is estimated that from June 30 to July 4, treasury bond issuance will be 0 yuan, with net financing of - 8.015 billion yuan; local bond issuance will be 7.2139 billion yuan, with net financing of 2.1676 billion yuan [33]. 3.4.2 Government Bond Payment - From June 23 to June 27, government bond net payment was 78.981 billion yuan, including 33.1 billion yuan for treasury bonds and 45.881 billion yuan for local bonds. It is estimated that from June 30 to July 4, the net payment will be - 0.594 billion yuan [39]. 3.5 Inter - bank Certificate of Deposit Tracking 3.5.1 Primary Market of Inter - bank CDs - From June 23 to June 27, inter - bank CD issuance was 72.64 billion yuan, with net financing of - 41.15 billion yuan. The maturity scale from June 30 to July 4 was 27.67 billion yuan. By bank type, city commercial banks had the highest issuance; by term type, 3M CDs had the highest issuance [42]. - The overall issuance success rate was 94%. State - owned banks and other banks had a 100% success rate, and 3M CDs had a 95% success rate. The issuance interest rates of all types of banks and terms decreased [42][43]. 3.5.2 Secondary Market of Inter - bank CDs - From June 23 to June 27, despite the tightened cross - quarter liquidity, the yields of secondary - market CDs of all terms increased slightly, and the yield curve was partially inverted [60]. 3.6 Excess Reserve Ratio Tracking - The estimated excess reserve ratio at the end of May 2025 was 0.52%. From June 23 to June 27, the central bank's net injection in open - market operations was 126.72 billion yuan, and government bond net payment was 78.981 billion yuan, increasing the excess reserve scale by 47.739 billion yuan [64].

Core Viewpoint - The central bank may adopt measures such as reserve requirement ratio cuts to provide liquidity support to the market, especially considering the potential acceleration of government bond issuance in the third quarter [1] Group 1 - Citic Securities' chief economist Mingming indicates that financial institutions, particularly banks, have a certain demand for liquidity support [1] - The supportive monetary policy stance suggests that the central bank could utilize tools like open market operations or relending in addition to reserve requirement ratio cuts [1]