What Is a Short Rate?

Short-term interest rate, Short-term interest rate. The short-term interest rate refers to the interest rate of various financial assets with a financing period of less than one year. Also refers to interest rates on the money market.

Short-term interest rate

Right!

Short-term interest rate, Short-term interest rate. Short-term interest rate

Investment products such as stocks and funds

Changes in short-term interest rates.

First, the central bank has stepped up its efforts to return. After the National Day, the central bank began to quickly withdraw the passive liquidity in September: it issued 152 billion yuan of targeted central bank bills on October 11; on October 13, it announced an increase in the deposit reserve ratio by 0.5 percentage points, and the payment date is set on October 25 Japan; the central bank will launch innovative liquidity withdrawal methods, special deposits for small and medium-sized banks and credit cooperatives, with a term of 3 months and 1 year, with the same interest rate as the central bank bill, thereby increasing the institutional coverage of the central bank's withdrawal of funds .

Short-term interest rate-chain effect

In January and September, the central bank's open market operation of net currency was 187.74 billion yuan. In October, the central bank and the repurchase currency released at the end of the period were 360 billion yuan. The two together add up to a total of 547.74 billion yuan. Therefore, even with the above-mentioned withdrawn funds The measures still failed to offset the increase in liquidity of the stock, and the incremental liquidity released due to new foreign exchange accounts has not yet been considered.

2. Speaking of the impact of the central bank's withdrawal of funds on short-term interest rates, retrospectively, the central bank has stepped up efforts to shrink liquidity. For example, in March of this year, it netted 645.73 billion yuan in the domestic currency open market, but short-term interest rates did not increase significantly. .

Second, interest rate hikes are expected to heat up again. The financial operation data just released by the People's Bank of China shows that in September, M1 and M2 increased by 22.07% and 18.45% year-on-year respectively, and RMB loans increased by 17.13%, and the growth rate is still fast. At the same time, the market expects that prices and other data will also run at a high level. The combination of the above factors makes it difficult to avoid another rate hike. When the interest rate increase is expected to be strong, due to careful consideration, investors often shorten the duration and invest funds in short-term products to avoid interest rate risk, resulting in small short-term interest rate fluctuations. This time, the situation is different. Short-term interest rates have risen and floating spreads have widened. The long-term interest rate is relatively stable.

3. The demonstration effect of capital flow mainly refers to the purchase of new shares, and there are also some intermediate channels. The amount of new stock issuance attracted new highs repeatedly. On September 17, CCB's A-share issuance freezes 2.28 trillion yuan, exceeding 2 trillion yuan for the first time. On September 20 and September 25, CNOOC and China Shenhua issued the frozen funds. 2.55 trillion and 2.66 trillion. At the end of December last year, the scale of funds raised by China Life was 28.3 billion yuan, and the frozen funds were only 832.6 billion yuan. Not only the current frozen stocks have a large amount of funds, the yield is also considerable, for example, Shenhua's new stock purchase yield is as high as 2.09%. Such a high return and the smooth flow of purchase channels have attracted a considerable number of bond market funds. At the same time, because of the high repurchase interest rate during the purchase of new shares, even if they do not purchase, the return on capital is higher, and the opportunity cost of holding cash is reduced.

Short-term interest rate

The combination of the above-mentioned demonstration effect of capital flows and the increase in currency withdrawal are the main factors for the low repurchase rate and the jump in short-term interest rates. As far as the flow of funds is concerned, the changes in the capital entering the stock market can be roughly reflected by the increase or decrease in liabilities of other depository companies to other financial companies. Data from monetary authorities show that in the first half of this year, the liabilities of other deposit-taking companies to other financial companies increased sharply from 1.88 trillion at the beginning of the year to 3.23 trillion at the end of June, with a net increase of as much as 1.36 trillion. Such a huge amount of capital change, from the perspective of the stock, part of it comes from the relocation of deposits in the banking system, which involves changes in the debt structure, and the other part comes from the adjustment of non-deposit asset structures of various institutions and individuals, including bond assets, especially Is a short-term bond with better liquidity; there is also an entry from incremental.

As more and more institutions enter the field of liquidity control, the demonstration effect of capital flows is gradually increasing, and the adjustment of bond asset structure seems to have begun to emerge. Whether this change is short-term or structural, it has different meanings for the movement of the yield curve and the arrangement of operating modes.