Why Did PBoC Stop 28-Day Repurchases?

Quick answer: Spring Festival. It's January 28. If there was a 28-day reverse repo, it would land during the holiday.
iFeng: 央行暂停14天逆回购意味着什么?
Since December 28, 2016, the central bank has six consecutive trading days undeveloped 28 days reverse repo operations; at the same time, January 5, 2017, the central bank began 14 days suspended reverse repurchase operations, in theory, this distance before the Spring Festival can The 14th day of the reverse repurchase operation on the last day of January 12 (14 days reverse repurchase expiration date January 26, January 27 the first day of the Spring Festival holiday) a full one week earlier.

The central bank pause for long term reverse repurchase (14 days, 28 days), there are two completely different interpretation: a view that the central bank aims to further shorten the length of the discharge, use longer MLF funds to serve, Further uplifting the cost of capital; another view, the central bank's purpose is to reduce the lock short to put long, suspended 28 days reverse repurchase, and switch to a larger 7 days, 14 days reverse repurchase supplement, help reduce capital costs .

For the above two points of view, we believe that are "over-reading." We believe that the central bank to suspend the 28-day reverse repurchase operations, but the time node near the Spring Festival, the reverse repurchase period to adjust the portfolio to make the reverse repurchase date is not within the Spring Festival holiday.

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