Actually, we are not talking about food. What we are talking about here are the four weapons used by the central government to adjust interest rates and money supply, and each weapon is different.

Understand the basic situation

First, the state’s means of regulating macroeconomics: monetary policy and fiscal policy. Among them, monetary policy mainly controls the money supply and interest rates at a level suitable for the country's economic development. If there is too much money supply in the market, the excess funds will have to find ways to invest. As a result, many problems will arise in the areas that these funds care about and even in the entire market: inflation, overheating of investment, bubbles, etc. At this time, the central bank will have to find ways to reduce the money supply. If the economy overheats and everyone borrows money to invest, banks will try their best to lend money. This will cause disordered investment, put the economy in an extensive and inefficient state, and lead to "double expansion" of investment and credit. At this time, the central bank will think of ways to increase interest rates and reduce borrowings.

What tools do you use to adjust it?

SLF,

MLF, SLO, PSL. The Chinese names are jokingly called hot and sour noodles, spicy noodles, hot and sour lotus root, and pizza basket (acronym). Let’s introduce them one by one!

SLF (Also known as: Standing Lending Facility, Standing Lending Facility, Hot and Sour Noodles)

A mortgage loan initiated by a financial institution. When the financial institution is short of money, it provides one-on-one loans to Yang Ma asked for a bowl of "hot and sour noodles" to satisfy her hunger. The term is generally 1 to 3 months, and the loan interest rate is set by the central government based on the needs of monetary policy. Therefore, the central bank can borrow money from commercial banks to inject money into the market through mortgage loans to commercial banks, which can be used to adjust the market's short-term money supply and interest rates.

MLF (Also known as: Medium-term Lending Facility, Medium-term Lending Facility, Spicy Noodles)?

It is also a mortgage loan, but the loan term is longer. If it is about to expire, you can renegotiate the interest rate with the central bank and get a new round of loans. However, loan disbursement is limited to “agriculture, rural areas and rural areas” and small and micro enterprises, and is used to adjust the money supply and interest rates in the medium term.

SLO (alias: Short-term Liquidity Operations, short-term liquidity adjustment tool, hot and sour lotus root)

Mainly forward repurchase and reverse repurchase with a term of less than 7 days , mainly used to adjust the ultra-short-term money supply and interest rates within 7 days

PSL (alias: Pledged Supplementary Lending, mortgage supplementary loan instrument, pizza basket)

In order to support some For the construction of specific projects, lower-cost mortgage loans are provided to policy banks (such as China Development Bank, etc.). The term is generally 3 to 5 years, and the mid-term market interest rate can be adjusted.

Explain two terms

Mortgage loan

This is easy to understand. Commercial banks have many assets such as: commercial paper, securities, credit assets (claims) )wait. The central bank can let commercial banks mortgage some assets with high credit ratings and lend money to commercial banks to achieve the purpose of injecting currency into the market.

Repurchase

A commercial bank first sells a certain asset such as commercial paper to the central bank, and then signs an agreement with the central bank to agree to repurchase it at a slightly higher price on a certain day in the future. If you buy it back at the price, this is called repurchase. What we do from the perspective of commercial banks is forward repurchase, and what we do from the perspective of the central bank is reverse repurchase.

Lastly put a summary picture, hehe!