The balance profit paid by the central bank to the central finance exceeds 1 trillion yuan, and this profit of 1 trillion yuan is obtained from the investment income of reverse repurchase, medium-term lending facility (MLF), refinancing and foreign exchange reserves in the open market operation.

On March 8, the central bank announced that the surplus profits would be turned over to the central finance according to law, with a total amount exceeding 1 trillion yuan. Many netizens have been screened by this news. In fact, this is nothing new, but a practice. It is a common practice in China to arrange specific state-owned financial institutions and franchisees to pay profits, such as the General Administration of Tobacco, which is particularly profitable because of its tobacco monopoly. The state may require it to pay part of the profits as needed. The same thing will happen to CIC and the central bank, but some netizens may be curious. How did this 1 trillion profit come from? You can be sure if you printed it yourself. Let's talk about where this profit of 1 10,000 yuan comes from:

I. Reverse repurchase in open market operation

As we all know, open market operation is the magic weapon of monetary policy. The central bank buys securities from primary dealers and agrees to resell them to primary dealers on a specific date. In this process, if the securities bought at a low price can be sold at a high price, a lot of profits will be obtained, and part of the profit of 1 trillion will be obtained through this operation.

Second, the medium-term lending operation is convenient.

Medium-term loan facility is referred to as MLF. The central bank releases liquidity to the market according to the time limit required for liquidity, and it needs to pay the central bank interest rate in the process. For example, the central bank carries out a 300 billion MLF operation package, and the winning financial institution needs to pay interest at the prescribed interest rate.

Three. Foreign exchange reserve investment income

China has abundant foreign exchange reserves, and the income from the investment of these reserves is also part of the profits.

Do you know that the balance profit paid by the central bank to the central finance exceeds 1 trillion? Where does this 1 trillion profit come from? ? Welcome to leave a message for discussion.