China Securities News: The 7-day reverse repurchase operation interest rate has declined, which does not mean that the downward space for long-term bond yields has opened

On July 22nd, the article said that in addition to the adjustment of the invite tenders method, the interest rate of the 7-day repurchase operation in the open market has also been reduced from the previous 1.8% to 1.7%, which is the first adjustment since August 2023. Experts said that the reduction of policy interest rates is expected to be gradually transmitted to the real economy through financial marekt, which will promote the reduction of comprehensive financing costs, consolidate the positive trend of economic recovery, and break the negative cycle of long-term bond yields falling and expectations weakening. It is worth noting that the decline in the interest rate of the 7-day reverse repurchase operation does not mean that the downward space of long-term bond yields is opened. The central bank lowered the 7-day reverse repurchase operation interest rate this time, with the intention of increasing counter-cyclical adjustment efforts and smoothing out short-term economic fluctuations; while medium and long-term bond yields reflect more long-term economic trends and should be evaluated from a cross-cyclical perspective.