Report Industry Investment Rating - Not provided in the given content Core Views - The calculated September 2025 excess reserve ratio is at a high level compared to the same period in previous years, but the core excess reserve ratio (excluding the central bank's reverse repurchase balance) is at a low level during the same period. This divergence indicates that the current excess reserves of the banking system rely on central bank injections, and the 1.4% 7D reverse repurchase rate of the central bank directly forms the lower limit of DR007 [1][3]. - With the slowdown of government bond issuance and commercial banks' reduced focus on loan - volume targets, the core excess reserve ratio is expected to rise slightly in the fourth quarter [4]. Summary by Directory 1 How to View the Divergence between Excess Reserve Ratio and Core Excess Reserve Ratio - The September 2025 excess reserve ratio (calculated by the five - factor method) is 1.59%, up from 1.22% in August and compared to 1.80% in September 2024. It is the second - highest in September over the past five years [2][11]. - The core excess reserve ratio in September 2025 is 0.64%, while the calculated core excess reserve ratios in September of the past four years were 0.98%, 1.07%, 0.42%, and 1.15%. The divergence shows that the excess reserve level of the commercial banking system depends on the central bank's open - market reverse repurchases, and the central bank's injections affect the level of excess reserves [3][12]. - The impact of loans on excess reserves has been decreasing. From 2022 to Q3 2025, the new RMB loans of commercial banks were 4.4 trillion, 4 trillion, 2.75 trillion, and 1.83 trillion respectively, and the growth rate may remain low in Q4. As of October 17, 2025, the remaining government bond issuance amount is much lower than the quarterly issuance in the first three quarters of 2025 [4][17]. 2 Narrow - sense Liquidity 2.1 Central Bank Operations: Continuous Net Injection of Outright Reverse Repurchases - In the past week (10/13 - 10/17), the central bank's pledged reverse repurchase had a net withdrawal of 3479 billion yuan. As of October 17, the central bank's reverse repurchase balance was 7891 billion yuan, significantly lower than at the end of September, in line with the pattern of "injections at the end of the month and withdrawals at the beginning of the month" [19]. - In October, the total maturity amount of outright reverse repurchases was 13000 billion yuan (8000 billion yuan for 3M and 5000 billion yuan for 6M), and the MLF maturity was 7000 billion yuan. The central bank's net injection of outright reverse repurchases in October was 4000 billion yuan [20]. 2.2 Institution - level Funding Supply and Demand: Strong Supply and Demand - On October 17, large - scale banks' net funding supply (flow concept, excluding same - day maturities) was 4.6 trillion yuan, an increase of 6899 billion yuan from October 10, and the net funding supply balance was 5.2 trillion yuan, an increase of 6170 billion yuan from October 10, both at relatively high levels compared to the same period in previous years. The net funding supply balance of money market funds was 1.3 trillion yuan, a decrease of 5374 billion yuan from October 10, in line with the rule of "less net funding supply in a loose liquidity environment". The net funding supply of joint - stock commercial banks was - 2118 billion yuan, at a low level compared to the same period in previous years [21]. - On October 17, the balance of bonds to be repurchased in the inter - bank pledged repurchase market was about 12.0 trillion yuan, an increase of 3340 billion yuan from October 10. The full - market leverage ratio was 107%, up 0.22 percentage points from October 10, and the leverage ratio of non - legal person products was 113%, up 0.44 percentage points from October 10 [30]. 2.3 Repurchase Market Transaction: Stable Volume and Price - In the past week, the volume and price of the inter - bank pledged repurchase market were stable. The median daily trading volume was about 8 trillion yuan, an increase of 4665 billion yuan compared to October 10 - 11. The median R001 was 1.35%, still at a low level. The median spread between R001 and DR001 decreased by 2.8bp to 3.9bp, and the median spread between GC001 and R001 decreased by 5.5bp to 4bp, indicating low liquidity friction [34]. - The funding sentiment index remained around 50, and the market generally loosened in the afternoon [36]. 2.4 Interest Rate Swaps: Slight Decline - The 1 - year FR007 IRS rate and the 1 - year SHIBOR 3 - month IRS rate increased compared to last week. The median 1 - year FR007 IRS rate was 1.54%, in the 9th percentile since 2020, and the median 1 - year SHIBOR 3 - month IRS rate was 1.61%, in the 23rd percentile since 2020 [43]. 3 Government Bonds: Neutral Net Payment Pressure for Government Bonds in the Coming Week 3.1 Next Week's Net Payment for Government Bonds - In the coming week, the expected net payment for government bonds is 1584 billion yuan, with a neutral overall net payment pressure. The net payment for treasury bonds is 216 billion yuan, and for local government bonds is 1367 billion yuan. The net payment pressure is relatively high on Tuesday, and the net repayment amount is the largest on Wednesday [44]. 3.2 Current Government Bond Issuance Progress - As of October 18, the net financing progress of treasury bonds was 84.1%, an increase of 0.2% in the past week, with about 1.06 trillion yuan of remaining net financing space in 2025. The issuance progress of new local government bonds was 84%, with 0.83 trillion yuan of remaining issuance space (excluding the proposed 5000 - billion - yuan local government bond quota balance). The issuance of refinancing special bonds has completed the annual task. The supply of government bonds slowed down in October, and future issuance depends on the issuance rhythm of the 5000 - billion - yuan local government bond quota balance and the early allocation of the new local government debt quota in 2026 [48]. 4 Inter - bank Certificates of Deposit: Significantly Reduced Net Financing, and the Long - term Liability Pressure of Banks May Be Controllable 4.1 Absolute Yields - On October 17, the SHIBOR quotes for overnight, 7 - day, 1M, 3M, 6M, 9M, and 1Y were 1.32%, 1.42%, 1.56%, 1.58%, 1.64%, 1.66%, and 1.67% respectively. The yields of 1M and above for AAA - rated inter - bank certificates of deposit of commercial banks were 1.5%, 1.59%, 1.64%, 1.66%, and 1.67% respectively [50]. 4.2 Issuance and Outstanding Amount - From October 13 to 17, the total primary issuance of inter - bank certificates of deposit was 7295.30 billion yuan, an increase of 7130 billion yuan compared to October 9 - 10. In terms of issuance terms, the proportions of 1M, 3M, 6M, 9M, and 1Y were 12%, 20%, 44%, 5%, and 19% respectively, with 1M and 9M decreasing by 57.49 and 3.08 percentage points, and 3M, 6M, and 1Y increasing by 12.81, 38.65, and 9.12 percentage points respectively [54]. 4.3 Relative Valuation - On October 17, the spread between the 1 - year AAA - rated inter - bank certificate of deposit yield and R007 was 20bp, in the 40th percentile since 2020, and the spread between the 10 - year treasury bond yield and the 1 - year AAA - rated inter - bank certificate of deposit yield was 16bp, in the 32nd percentile since 2020 [56].