In order to maintain sufficient liquidity in the banking system, the People's Bank of China (hereinafter referred to as the "Central Bank") recently announced that on June 16, it will carry out a 400 billion yuan buyout reverse repurchase operation with a period of six months (182 days) by means of fixed quantity, interest rate bidding and multi price winning. Open market buyout reverse repurchase is a tool launched by the central bank in October 2024, which can enhance the ability to adjust liquidity across time periods within one year and help improve the refinement level of liquidity management. It is worth noting that on June 5th, the central bank broke the tradition of announcing the month end buyout reverse repurchase operation and announced a large-scale buyout reverse repurchase operation at the beginning of the month. As of now, this is also the first time that the central bank has used this tool twice within a month. Specifically, on June 5, the Central Bank announced that in order to maintain sufficient liquidity in the banking system, on June 6, 2025, the People's Bank of China will carry out a 100 billion yuan buyout reverse repurchase operation in the form of fixed quantity, interest rate bidding, and multi price winning, with a period of three months (91 days). Wang Qing, Chief Macro Analyst of Dongfang Jincheng, stated in an interview with Securities Daily that data shows that in June, there were 500 billion yuan of 3-month and 700 billion yuan of 6-month buyout reverse repos due, respectively. This means that as of June 16th, the central bank will implement a net investment of 200 billion yuan in buy off reverse repos for that month. Wang Qing believes that on the basis of the central bank's reserve requirement ratio cut in May, which released about 1 trillion yuan of long-term liquidity, the increase in buyout style reverse repurchase in June will continue to increase medium-term liquidity injection. On the one hand, it will help to maintain sufficient liquidity in the banking system and control fund fluctuations during the period of continuous large-scale issuance of government bonds and the peak maturity of interbank certificates of deposit in recent months; On the other hand, this also sends a policy signal of continuous strengthening of quantitative monetary policy tools, which helps to promote the process of easing credit and strengthen countercyclical regulation. Mingming, the chief economist of CITIC Securities, said that, on the whole, the long-term liquidity supply of the central bank exceeded trillion yuan in May. In contrast, the net payment of treasury bond in May was 910.2 billion yuan, the highest level since 2025; The net payment of local government bonds was 547 billion yuan. It can be seen that the long-term liquidity injection in May can basically hedge the net payment pressure of government bonds. (New Society)