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Fourth Straight Day Of OMO Injections


The PBOC injected a net CNY 40bn of liquidity into the system via OMOs today, the fourth straight day of injections bringing the total to CNY 160bn. The PBOC has reiterated that the injections are to ensure liquidity into month end and should not be seen as easing, the Central Bank injected a net CNY 40bn at the end of July and CNY 100bn at the end of June. Repo rates are lower, but the 7-day repo rate at 2.33% is still slightly above the prevailing 2.20% PBOC rate.

  • Elsewhere China will accelerate the issuance of local government special bonds moderately to ensure substantial work at the end of this year and early next year, the 21st Century Business Herald reported citing a report by the Ministry of Finance. Such bond sales may be about CNY500 billion for Sep, CNY700 billion for Dec, and a total of CNY600 billion in Oct and Nov, the newspaper said. Infrastructure investment may be boosted in the following months, though any growth could still be limited by the need of controlling local implicit debt, the newspaper said citing Wu Qiying, an analyst with GF Securities.
  • Meanwhile Huarong finally got round to releasing earnings on Sunday, the report showed a loss of CNY 102.9bn while the firm cut shareholder equity by nearly 85%. The firm's key capital level was substantially below regulatory requirements as of June

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