In August, the local government bond issuance significantly accelerated, and the monthly issuance reached a new high for the year. The peak supply of government bonds this year has been overall postponed. Minsheng Bank expects that the supply of local government bonds in September and October will still be considerable. The remaining quota for new local government bonds will be basically exhausted by the end of October and fully utilized by the end of the year. At the same time, in terms of funding, the disturbance of government bond supply on liquidity has already emerged, and commercial banks' reliance on issuing interbank certificates of deposit to supplement liabilities has strengthened. Since the cost of issuing interbank certificates of deposit has been fluctuating upwards since August, it still remains at a relatively high level, reflecting the increasing pressure on bank liabilities. Currently, the market is concerned about whether the central bank will alleviate the need for banks to replenish liabilities through reserve requirement reductions. If the reserve requirement ratio is lowered, the interest rates on certificates of deposit are expected to decrease. However, there is also a view that the central bank may release funds through alternative means such as buying bonds. The difference between reserve requirement reductions and bond purchases is that the former can release funds in one go, making it difficult to reverse the operation, while the latter can be carried out in batches and funds can also be recovered through selling bonds. (Daily Economic News)