What does it mean that the central ticket is being repurchased absent

Repo means that the central bank uses the bonds held in its hands as collateral to inject funds into financial institutions, and promises to buy back the bonds at maturity and pay a certain amount of interest. Positive repurchase is one of the open market operation methods often used by the central bank, and the central bank can achieve the effect of withdrawing funds from the market by using the positive repurchase operation.

The absence of a repurchase is when the bonds held by the central bank are not bought back after they expire. That is, there is no return of funds from the market.

Generally speaking, there are three major impacts on the development of positive repos: short-term market interest rates, market capital adequacy, and investors' psychological expectations.

When the central bank conducts positive repo operations, it will form a trend that guides short-term market interest rates to rise, which in turn may lead to an upward trend in medium- and long-term interest rates. Of course, it takes a lot to be possible;

When the central bank is conducting a repurchase operation, the central bank appears as a borrower of funds, thereby reducing the bank's excess reserves---i.e., the bank's"Spare money"Decrease. This will directly reduce the bank's lending capacity, which in turn will tighten the market as a whole.

As for the impact on psychological expectations, it is achieved through the above two effects.

Therefore, the absence of positive repo can be understood as the central bank injecting liquidity into the market in disguise, that is, printing money into the market in disguise. This is generally the case when the economy is considered deflationary.

Addendum: The concept of dishonesty is not addressed here. Because central bank bills are a monetary instrument, they have to pay interest costs when they are repurchased after they are issued.

For the institutions that buy, there is a benefit from buying central bills, so they naturally have to bear the risk. This risk is that the central bank bill cannot be paid in time when it expires. However, once the payment is not made, the lock-up period of the central bank bill will be extended, and for these institutions, it will continue to hold.

In the future, when the payment is made, the institution will also get a greater return.

A buyback is when the seller buys back the note within a specified period.

The absence of repurchase means that the central bank does not buy back the bills issued by the central bank after they expire.

Forward repurchase is a transaction in which one party uses a certain scale of bonds as collateral to inject funds and promises to repurchase the pledged bonds in the future. It is also one of the open market operation methods often used by the central bank, and the central bank can achieve the effect of withdrawing funds from the market by using the positive repurchase operation. Compared with central bank bills, positive repo will reduce operating costs and have a stronger effect of locking in funds.

The issuance of central bank bills is the issuance of central bank bills and bank bills, which are short-term debt certificates issued by banks to commercial banks in order to regulate the excess reserves of commercial banks, and their essence is bank bonds. The reason why it is called"**Bank notes", in order to highlight its short-term characteristics.

The issuance of central bills is that banks take money to buy central bills, and the central bank withdraws money from the market; Repo is the central bank to take money to a bank, is the central bank to put money into the market. It can be said that the issuance of central bank bills and repurchase are both means for the central bank to regulate and control the currency, but in opposite directions.