What does the reverse repurchase mean? __ Financial

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I believe most people must have heard the word "national debt", even if you have not bought bonds, did not invest in bonds, but also must have heard the masses of people lining up to buy bonds of related news. As one of the most popular investment methods in China, national debt has no place to be replaced in the domestic investment and finance market. About the investment in national debt, there are a lot of knowledge, there are some investors who want to buy bonds do not know what is called reverse repurchase, reverse repurchase expiration is the meaning of this article to introduce the relevant content.

To understand what the reverse repurchase means, you have to figure out what the reverse repurchase is:

The reverse repurchase is to finance the capital to merge the funds into the party, collect the securities as collateral, and collect the principal and interest in the future , and release the transaction behavior of the securities mortgage.

Repurchase has the meaning of withdrawing money , reverse repurchase is to lend money to others temporarily .

The central bank reverse repurchase for the People's Bank of China to buy securities for the first-tier dealers, and agreed to sell the securities to the first-tier dealers on a specific date. is to get the pledged bonds and lend the money to the commercial banks. The aim is primarily to release liquidity to the market and, of course, to obtain the interest income of repurchase. Operation is the central bank to lend money to commercial banks, commercial banks to pledge the bond to the central bank, when it expires, commercial banks return money, bonds back to commercial bank accounts.

Main effects of central bank reverse repurchase:

1, reverse repurchase volume itself has indicated that the market funds are scarce. The central bank's massive reverse buybacks are intended to ease short-term liquidity tensions.

2, reverse repurchase rate has become the new market interest rate vane.

3, the various terms of reverse repurchase alternate use, so that more accurate capital delivery.

4, reverse repurchase is ranked as the first of all types of liquidity tools.

5, the central bank reverse repurchase meaning is basically a deposit reserve ratio in miniature, the gap lies in the magnitude of the problem.

Through these explanations, we can know that when the reverse repurchase expires, commercial banks to the central bank to lend money to the central bank, and the central bank to the commercial banks pledged bonds to commercial banks , this is a very easy operation. I hope that the above information on the reverse repurchase of the relevant knowledge, can provide some help to the vast number of investors.