According to the CITIC Securities Research Report, according to our estimates, there was a certain liquidity gap in April due to government bond financing, seasonal M0 fluctuations, and the expansion of the payment base. However, we think what is more noteworthy is the impact of large settlements on liquidity. If commercial banks continue to settle remittances, but the central bank does not buy foreign exchange, they may face financial friction, requiring the central bank to hedge against them through other monetary policy tools.

According to the CITIC Securities Research Report, according to our estimates, there was a certain liquidity gap in April due to government bond financing, seasonal M0 fluctuations, and the expansion of the payment base. However, we think what is more noteworthy is the impact of large settlements on liquidity. If commercial banks continue to settle remittances, but the central bank does not buy foreign exchange, they may face financial friction, requiring the central bank to hedge against them through other monetary policy tools.