The Empirical Research Of China’s Inter-bank Bond Repurchase Rate Influencing Factors

Refers to the so-called bond repurchase transactions between market participantsreached through one-way, based on the fixed income securities repurchasetransactions, include bond pledged repo and outright bond repurchase transactions.With the bond market by leaps and bounds, the bond repo market has become themajor market participant place short-term financing, and liquidity management hasbecome an important platform for the People’s Bank of open market operations, toachieve monetary policy transmission.Fluctuations are a result of the inter-bank money market participant interactionbetween demand and supply of each bond repurchase rate. At the same time, it willpass out changes in the form of changes in the macroeconomic, monetary policy,national and international financial markets. Taking into account the relationshipbetween the repo rate and the linkage of many economic variables, this paper regardsseveral economic variables influencing factors as changes in the repo rate and theempirical analysis, to study their impact on the inter-bank bond market, and theresults must be the conclusion of the study.In1996, China’s interbank bond market was established that it was a major eventin the development of China’s bond market, marking China’s bond market to mature.On China’s bond market, commercial banks are indispensable power. Theestablishment of the inter-bank bond market is more conducive to take advantage ofcommercial banks. When the inter-bank bond market has just established, onlycommercial bank is market player market participants in this category. Throughcontinuous development, market participants extend to the general financialcompanies including securities companies, insurance companies and fund companiesand other financial enterprises, in the same time,the size of the market is moresignificant growth and a number of innovative products are introduced, the inter-bankbond market more abundant transactions. Currently, the inter-bank bond market is themain force of China’s bond market. Exchange-traded market is an important part ofChina’s bond market. The commercial banks are an important supplement to counterChina’s bond market.Based on western economic theory interest rates, the use of Keynes’s theory of liquidity preference and loanable funds theory analysis of the factors affecting theinter-bank bond repurchase rate, with the use of empirical analysis, this paper furtherdraw different factors detailed herein selected degree of influence on the repo rate. Inthis paper, data is selected from January2003to June2013inter-bank bondrepurchase rate. With the degree of market improve, reform of the financial sectors ofthe economy increasingly rapidly, Data has strong timeliness, so the need to usemore representative and timeliness of data is important in order to obtain betterresults. Through empirical analysis of the factors affecting the repo rate, the paperanalyzes the results obtained, and some of the results were analyzed, in the last, thepaper put forward the corresponding policy recommendations in the back of thediscourse.