The statement "release seven trillion yuan of water" is wrong. The normal refinancing by the central bank was packaged up by a group of reporters who did not ask for a thorough explanation and wanted to report a big news, and turned it into an appalling leak. The content of re-lending has been popularized by many people. It is that the central bank provides loans to commercial banks at a certain proportion based on the credit assets in the hands of commercial banks. After the banks have this money, they can then lend it out, so that the flow in the market There is more money. From this point of view, the central bank is indeed releasing money. But there is a saying that goes, “It’s a hooligan to talk about toxicity regardless of the dose.” Similarly, it’s a hooligan to talk about toxicity regardless of the amount. A major role of the central bank is to balance supply and demand in the currency market (Currency Market). When demand in the money market exceeds supply, deflation will occur and economic activity will be suppressed. At this time, the central bank will release money to stimulate economic growth. If there is too much, then the supply exceeds the demand, which will cause inflation (note that I use inflation here, not devaluation). Contrary to the impression of many people, inflation is not a bad thing, hyperinflation is.

The first is through lowering the RRR. After banks absorb depositors' money, they must deposit part of it to the central bank as reserves to ensure that depositors have money available when they withdraw money, and the remaining money is used for lending. After the loaned money enters the economy, part of it will flow back to the bank, and the bank will deposit a part of the deposit and then lend the remaining money out. Therefore, banks play the role of amplifying the funds flowing in the market. If the reserve ratio is high, banks will be able to release less money after absorbing deposits. On the contrary, if the reserve ratio is lowered, banks will be able to release more money, and there will be more money in the market.

The second type, through refinancing, is the so-called "seven trillion" this time. In fact, it is similar to the first one. The bank asks the central bank for another amount of money based on the loan it has previously issued, and then lends it out in the form of a loan. This way, there will be more liquidity in the market. The third way is to release money by buying and selling treasury bonds. The central bank purchases treasury bonds in the open market, and the money to buy treasury bonds enters the market. On the other hand, if you sell government bonds, you will recover part of the funds flowing in the market, thus achieving the purpose of reducing the money supply. What is commonly referred to as QE (quantitative easing) refers to this method. It can be seen from the principles of these three tools that only the third method can the central bank know how much water has been released (hence the name "quantitative easing"). Even the central bank itself does not know how much water has been released in the first two methods. Why? Because when the economic environment is in a downward cycle, banks may not be willing to lend money. In the current market, it can be said that funds are easy to obtain, assets are hard to find, and there are not many safe investment opportunities. Therefore, I doubt how much water the central bank can release through re-lending. In short, I think whether the RMB rises or falls does not depend at all on the central bank's re-lending.