CHINA MARKETS: Yuan Stronger; Rates Lower; Stocks Down

     BEIJING (MNI) - The yuan was stronger against the U.S. dollar on Tuesday

after the People's Bank of China set the fixing rate much stronger for the day.

     The yuan was last at 6.6579 against the U.S. unit, compared with the

official closing price of 6.6702 on Monday. It was the strongest the currency

has been since Aug. 10, when it touched 6.6485.

     The PBOC set the yuan central parity rate at 6.6597, 0.17% higher than

Monday's 6.6709. It was the strongest fixing since 6.6513 on Sept. 22 of last

year. 

     Money market rates were lower Tuesday morning. The seven-day repo average

was last at 2.8050%, compared with Monday's average of 2.8795%. The overnight

repo average was at 2.7141%, compared with Monday's 2.8758%.

     The People's Bank of China injected CNY40 billion in seven-day reverse

repos and CNY20 billion in 14-day reverse repos via open-market operations

Tuesday. This resulted in a net drain of CNY10 billion for the day, as a total

of CNY70 billion in reverse repos matured on Tuesday.

     The yield on benchmark 10-year China government bonds was last at 3.6040%,

compared with the previous close of 3.5966%.

     Stocks fell, with the liquor-making and oil sectors leading losses. The

benchmark Shanghai Composite Index was last down 0.11% at 3,283.14. Hong Kong's

Hang Seng Index was 1.02% higher at 27,431.51.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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