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MNI China Daily Summary: Friday, April 7
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY17 billion via 7-day reverse repos on Friday, with the rates unchanged at 2.00%. The operation has led to a net drain of CNY172 billion after offsetting the maturity of CNY189 billion reverse repos today, according to Wind Information. The operation aims to keep banking system liquidity reasonable and ample, the PBOC said on its website.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.9965% from 1.9679%, Wind Information showed. The overnight repo average increased to 1.3667% from 1.3465%.
YUAN: The currency strengthened to 6.8754 against the dollar from 6.8807 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 6.8838 on Friday, compared with 6.8747 on Thursday.
BONDS: The yield on 10-year China Government Bonds was last at 2.8825%, up from Thursday's close of 2.8800%, according to Wind Information.
STOCKS: The Shanghai Composite Index edged up 0.45% to 3,327.65, while the CSI300 rose 0.65% to 4,123.28. The Hang Seng Index was up 0.28% to 20,331.20.
FROM THE PRESS: Pork prices will remain subdued into April on strong supply continues, according to experts interviewed by the 21st Century Herald. Average pork prices in Q1 were CNY14.98/kg, with a high of CNY16.23/kg recorded Jan 1 and a low at CNY13.75/kg on Feb 3. Prices were CNY14.64/kg on April 6. Production costs are on average CNY17/kg, according to one expert. Prices will increase in May, as the market clears volumes of large and medium pigs, and demand recovers during the national holiday, the Herald said.
The development of the digital RMB will bring investment opportunities for the private sector, according to experts interviewed by Yicai. Following the PBOC's recent meeting on digital currency, experts expect growth in the software and hardware infrastructure industry, and said investors should focus on quality financial IT and equipment enterprises. Tech companies specialising in data security and encryption will also benefit, according to Yicai.
China will increase knowledge-intensive services exports and promote digital trade, according to Liu Xiangdong, vice minister at the China Centre for International Economic Exchange. In an interview with Securities Daily, Liu said services trade is normalising, as imports rebound faster than exports due to outbound travel service imports recovering quickly. He noted the export of knowledge intensive services reached CNY243.85 billion over Jan-Feb, an increase of 11% y/y, with fast growth in insurance (38%) and financial services (19.1%).
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