To maintain ample liquidity in the banking system, on December 25, the People's Bank of China (hereinafter referred to as the "central bank") conducted a 300 billion yuan medium-term lending facility (MLF) operation with a one-year term and a winning interest rate of 2%. Given that 1,450 billion yuan of MLF is maturing this month, the central bank has a net withdrawal of 1,150 billion yuan from MLF. CITIC SEC chief economist Mingming stated that in December, expenditures often exceed revenues, releasing a considerable amount of liquidity, along with local government bond payments concentrated in the early part of the month. By mid to late December, the one-year interbank certificate of deposit interest rate has dropped to a historical low, and overnight and 7-day rates have stabilized around the policy rate, indicating significant loosening of liquidity. Under the relatively sufficient interbank liquidity level and in an environment where the demand for MLF is not high, the central bank chooses to significantly withdraw MLF funds. On one hand, this continues the liquidity operation model of 'smoothing peaks and filling valleys' to avoid excessive flooding and the risk of capital idling; on the other hand, it continues to downplay the impact of MLF on the liquidity market. (Securities Daily)