What does it mean for the central bank to put 12 trillion into it

Market liquidity has increased to support the real economy.

Promote the increase of support for small and medium-sized enterprises, reduce the actual financing cost of the society, and guide banks to be less in the central bank by reducing interest rates.

To be precise, the central bank announced on February 2 that it would conduct trillions of reverse repo operations in the financial market on February 3.

First of all, let's explain what is a reverse repo operation, and the result of this wave of operations is equivalent to the release of RMB as mentioned in the question. The operation process is like this, first of all, commercial banks (such as Bank of China, China Construction Bank, etc.) have issued trillions of financial bonds (which can be regarded as IOUs) in the hope of raising funds. Then Yang Ma turned on the money printing machine and started printing money, printing trillions of yuan, and using the money to buy a bunch of bonds from commercial banks.

At this moment, the banks have the money in their hands, the central bank has the bonds in their hands, and the reverse repo operation is over.

After that, the bank can send these funds to all walks of life in the society, various large, medium and small enterprises through **, lending, investment and other operations to alleviate the situation of tight funds. But there is always a time when the IOU expires, and after expiration, do the opposite operation again, the central bank gives the IOU to the bank, and the bank returns the money to the central bank, this wave of operation is called repo, and the result is to reduce the flow of funds in the market.

Therefore, to sum up, this trillion is equivalent to the central bank lending money to the society, and then recovering the trillion is not a flood as everyone imagines, and our money has depreciated again.

To add another thing, the central bank usually announces the reverse repo operation in the morning of the upcoming one. But this time it was announced a day in advance. It shows how much the country cares for the first, but it is helpless to fall by a thousand shares.

The central bank has invested trillions of yuan in order to increase the liquidity of the market and make the market more fully funded.

The central bank announced through its official website that it would carry out a trillion yuan of reverse repurchase operations in the open market. Many people may not understand the "reverse repo", in fact, it is commonly said that the central mother lends money to financial institutions, and financial institutions pledge the valuable ** on hand to the central bank. The central bank issued a blockbuster notice this time in order to maintain the reasonable and abundant liquidity of the banking system and the smooth operation of the money market during the special period of epidemic prevention and control, and its operation amount reached one trillion yuan, which should be the largest open market reverse repurchase operation in history.

As the epidemic has affected the liquidity of institutions to a certain extent, this operation is a routine operation to alleviate liquidity, but the amount of funds is larger than in the past.

The main channels through which the central bank can release money to the society are:

1. Each unit receives cash from the bank and pays the wages of employees;

2. Expenditure on purchasing agricultural and sideline products from rural areas or farmers;

3. Expenditure on the purchase of industrial and mineral products and handicraft products;

4. Financial credit for agriculture;

5. Withdraw savings deposits from banks.

Currency release and withdrawal: Withdrawal indicates the flow of cash from the market back to the financial institution, while the release indicates the flow of cash from the financial institution into the market. When the cash income and expenditure of financial institutions to the whole society are offset, and the income exceeds the expenditure, it is called monetary withdrawal; When the income is less than the expenditure, it is called currency delivery.

For the difference between income and expenditure in a certain period within a year, it is called net withdrawal of money or net supply of money. The impact of this trillion on ordinary people, first of all, for ordinary people, the most closely related impact is that market prices should rise. Secondly, the possible future impacts on ordinary people are:

Housing prices**, interest rate cuts, RMB depreciation, etc. In fact, assuming that the central bank does not invest trillions, ordinary people should also ensure that they have liquidity in their hands to the greatest extent, and putting money in their own hands will also lead to problems such as a decrease in market capital circulation.

This means that the central bank has increased the amount of loans by trillions. These loans can be for residents' consumption (including buying a house), or they can also be used to solve difficulties for various enterprises.

The central bank has put in trillions of yuan, which is good news for the market.

Continue to inflation % money is becoming less and less valuable.

Prevent depletion of liquidity**.

It was the central mother who put trillions of soft girl coins into the market. The main thing is to increase the loan line of trillions to the market. But depending on what the specific aspects are, for example, it can be a housing loan, it can also be a loan for small and micro enterprises, or it can be a loan for the consumer market.

The renminbi has depreciated! 1. The PBOC decided to reduce the reserve requirement ratio of financial institutions by one percentage point on July 15, 2021 (excluding financial institutions that have implemented a 5% reserve requirement ratio. After this cut, the weighted average reserve ratio of financial institutions will release about 1 trillion yuan of long-term funds from the RRR cut.

2. Pros and Cons of Banks As the reserve requirement ratio has fallen by nearly half in the past decade, banks' asset-liability ratios are getting higher and higher. This is an increasing debt risk for the bank itself, and such a large amount of capital re-investment, so that the interest rate of bank loans cannot be increased, that is, the LPR will remain at a low level. The increased market launch has not brought more interest rate space to banks, but the risks are unavoidable.

The pros and cons of the RRR cut to banks are not too good.

Third, the biggest benefit is that the market is very short of money, and it is hoped that it can be financed at low interest rates. The main thing is that there are groups that can accommodate the funds. This should be obvious to everyone at a glance.

Fourth, the good news of the capital market In fact, every time the RRR is cut, a part of the funds will flow into the real estate market and the ** market, but due to a large number of new real estate and new listings, this market can not see much fluctuation, just a ripple. But from a relatively longer-term perspective, it is a good thing for real estate and the market.

The most loss-making group cut the RRR is to release water in the capital pool, which has increased by 1 trillion. Then this is equivalent to diluting the concentration of salt in the water. The deposit is equal to a relatively small amount.

At present, the deposits of Chinese residents are more than 80 trillion, and 1 3 of the trillion in the amount of currency, dilution also needs to bear various proportions in proportion. At a time when the world has begun to enter the signs of relative monetary tightening, it is still using RRR cuts to promote greater liquidity in the market, which can only be explained in one way, that is, the money is really needed to increase the liquidity of the market.

5. The People's Bank of China (PBOC) decided to reduce the reserve requirement ratio of financial institutions by one percentage point on July 15, 2021 (excluding financial institutions that have implemented a 5% reserve ratio for deposits). After this cut, the weighted average reserve ratio of financial institutions will release about 1 trillion yuan of long-term funds from the RRR cut.

Sixth, whether this RRR cut is good or negative, we need to do a good job in asset allocation. Put assets into different baskets and watch yours. The asset accounts used for financial management are divided into safe accounts and risk accounts.

In the safe account is the money that preserves and appreciates in value, and it needs to have a long-term stable income that can be maintained for decades.

As I believe everyone knows, the market will not officially open until today, and the interbank market and bond market will also open on February 3. It is worth mentioning that the central bank will inject trillions of liquidity today, but investors are not very clear about the situation. So, what does it mean for the central bank to invest trillions?

Let me take you to a brief understanding.

According to the announcement released on the official website of the People's Bank of China on January 2, in order to maintain reasonable and sufficient liquidity in the banking system during the special period of epidemic prevention and control and ensure sufficient liquidity**, the People's Bank of China will carry out an open market reverse repurchase operation of 1.2 trillion yuan on February 3. Today, 1.05 trillion yuan of reverse repurchase is due, plus the 1.2 trillion yuan invested today, a net investment of 150 billion yuan was realized on the same day, and the overall liquidity of the banking system is 900 billion yuan more than the same period in 2019.

February 3 is the first trading day after the opening of the market after the Spring Festival, the demand for funds held by all parties has risen, and the central bank's investment of trillions can ensure the abundant liquidity of the banking system and the stable operation of the money market. In the past, the central bank usually announced the announcement after the completion of the open market operation on the same day, but this time, the central bank issued a notice in advance the day before the market opened to provide liquidity to the market, which is also to better stabilize the expectations of investors at the opening of the A-share market and boost market confidence.

The above is a brief introduction to "what does it mean for the central bank to invest trillions", I hope it can give investors some help. It is worth mentioning that there are a lot of high-yield ** in the market at present, but the risk is relatively high, I do not recommend financial novices to buy this kind of **, after all, it is possible to lose the principal, and the degree of decline is relatively large.