1. Report Industry Investment Rating No information provided in the report regarding the industry investment rating. 2. Core Viewpoints of the Report - In February 2026, the central bank slowed down its bond - buying pace and lowered the forward foreign exchange sales risk reserve ratio. The overall liquidity in February was stable during the Spring Festival, and the capital performance before the Spring Festival was more stable under the central bank's active support. The capital gap in March is not significant, and the central bank is expected to maintain a relatively active investment state [1][3][4]. - The impact of exchange - rate appreciation on liquidity is basically offset. The central bank's reduction of the forward foreign exchange sales risk reserve ratio to 0% will help ease the RMB appreciation rate. The inter - bank self - regulatory supervision may be further refined, and in the short term, some banks may use certificates of deposit to undertake, which is beneficial for banks to reduce liability costs in the long term [5][74][78]. 3. Summary by Directory 2.1 February Capital and Liquidity Review: Stable across the Spring Festival 2.1.1 Capital Review: Narrow - range Fluctuation of Capital - In February 2026, the overnight capital fluctuation range narrowed compared with the previous month, and the 7D capital fluctuation range slightly expanded. The overnight capital fluctuated within a range of 0.12%, and the 7D capital basically ran stably between 1.45% - 1.55%. There was no inversion between overnight and 7D capital this month [12]. - At the beginning of the month, 70 billion yuan of 3M repurchase expired, and the central bank over - renewed 10 billion yuan. From February 5th to 12th, the central bank injected 1.4 trillion yuan of short - term funds through 14 - day reverse repurchase. On the 13th, the central bank over - renewed 50 billion yuan of 6M repurchase. Affected by factors such as pre - holiday cash withdrawal, government bond issuance, and new share subscriptions on the Beijing Stock Exchange, the capital price fluctuated briefly, with DR007 rising to 1.55%. By the end of the month, the capital market remained stable [13]. - The capital stratification pressure in February was at a seasonal low. The volatility of the spread between R007 and DR007 during the Spring Festival was smoothed out, and the spread between GC007 and DR007 rose from about 5bp at the beginning of the month to 10bp at the end of the month, both at seasonal lows [20]. - The volatility of overnight and 7D capital was at a seasonal low. The daily average trading volume of inter - bank pledged repurchase in February decreased compared with the previous month, with a monthly total of about 117 trillion yuan. The net lending scale of banks decreased, and the net lending scale of money market funds was relatively low [26][27][30]. 2.1.2 Liquidity Review: Temporary Consumption of Liquidity by Government Bond Payment and Spring Festival Cash Withdrawal - **Liquidity Aggregate**: In February, the base money increased by about 63 billion yuan. The government deposit consumed about 24 billion yuan of base money, the central bank's net investment was 82.19 billion yuan, and foreign exchange funds had a net investment of 5 billion yuan. After considering factors such as reserve freezing, cash withdrawal, and non - financial institution deposit changes, the excess reserve at the end of the month decreased by about 500 billion yuan, and the excess reserve ratio was about 0.93%, at a seasonal low. The narrow - sense excess reserve level after deducting reverse repurchase was about 0.37%, close to the seasonal level [32]. - **Open - market Operations**: In February, the central bank slightly withdrew short - term reverse repurchase in the open market, with a net investment of - 12.05 billion yuan and a reverse repurchase balance of 164 billion yuan at the end of the month, at a seasonal neutral level. The MLF investment was 60 billion yuan, with 30 billion yuan due, and the MLF balance was 7.25 trillion yuan. The net investment of 3M and 6M repurchase was 60 billion yuan, with a balance of 7.4 trillion yuan. The central bank's net purchase of government bonds was 5 billion yuan, 5 billion yuan less than the previous month. Other tools included a 15 - billion - yuan treasury time - deposit operation, with 15 billion yuan due, and PSL and other structural tools had an investment of 0 billion yuan and - 7.6 billion yuan respectively [34][40][43]. 2.2 February Monetary Policy Tracking: Slower Bond - buying Pace by the Central Bank and Lowered Forward Foreign Exchange Sales Risk Reserve Ratio - The central bank's bond - buying scale in February decreased to about 5 billion yuan, slightly lower than market expectations. The 10 - year government bond yield was relatively low, and the decrease in the central bank's bond - buying volume may reflect a relatively cautious attitude [50]. - The fourth - quarter monetary policy meeting in 2025 continued the moderately loose tone, with relatively limited incremental information. The central bank emphasized guiding short - term interest rates to operate around policy rates. The central bank decided to lower the forward foreign exchange sales risk reserve ratio from 20% to 0% starting from March 2nd to ease the RMB appreciation expectation [49][54]. 2.3 March Gap Prediction: Limited Capital Gap Pressure 2.3.1 Rigid Gap: Slight Consumption of Excess Reserves by Reserve Requirements and Slight Recovery of 3M Repurchase - In March, as it is a large - deposit month, the increase in general deposits will consume about 44 billion yuan of excess reserves. The MLF due amount is 45 billion yuan, slightly larger than the previous month. The total due amount of repurchase in March is 1.6 trillion yuan, including 1 trillion yuan for 3M and 600 billion yuan for 6M. Currently, 80 billion yuan of 3M repurchase has been renewed [58]. 2.3.2 Exogenous Shocks: Post - holiday Return of Cash Withdrawal and Non - financial Institution Deposits - Referring to previous years with a late Spring Festival, the "currency issuance" item in the central bank's statement may supplement about 44.07 billion yuan of excess reserves in March. The non - financial institution deposits may also supplement about 10.55 billion yuan of excess reserves [63]. 2.3.3 Fiscal Factors: Limited Government Bond Issuance and Season - end Fiscal Expenditure as a Benefit - Considering factors such as bond payment, tax revenue, and fiscal expenditure, the government deposit is expected to supplement about 64.15 billion yuan of liquidity in March [64]. 2.3.4 Comprehensive Judgment: Limited Season - end Liquidity Pressure - Overall, the capital gap in March is not significant. The main pressures come from quarter - end reserve requirements and tool maturities. Considering the central bank's current operation ideas, it is expected to maintain a relatively active investment state, and the capital pressure is limited [67]. 2.4 Other Factors - The impact of exchange - rate appreciation on liquidity is basically offset. The increase in market settlement demand leads to an increase in RMB deposits, and the reserve requirements freeze about 74.4 billion yuan of liquidity. However, the central bank's foreign exchange funds increased by 5 billion yuan in January, which basically offsets the impact on narrow - sense liquidity [5][72]. - The central bank's reduction of the forward foreign exchange sales risk reserve ratio to 0% will help ease the RMB appreciation rate. The inter - bank self - regulatory supervision may be further refined. If high - interest inter - bank deposits are reduced, banks may use certificates of deposit as a substitute. If the supply demand for certificates of deposit increases in March, the pricing may be slightly adjusted upwards, but the adjustment range is relatively controllable [74][78].