MNI China Daily Summary: Thursday, April 7

DATA: China's end-March foreign exchange reserves fell 0.8% from the previous month to USD3.19 trillion, or a drop of USD25.8 billion, the State Administration of Foreign Exchange said in a statement Thursday. That is a third straight monthly decline, according to Wind data.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.10%. The operation has led to a net drain of CNY140 billion after offsetting the maturity of CNY150 billion repos today, according to Wind Information. The operation aims to keep 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 2.0223% from the close of 1.9733% on Wednesday, Wind Information showed. The overnight repo average fell to 1.8131% from the previous 1.8282%.

YUAN: The currency strengthened to 6.3634 against the dollar from 6.3636 on Wednesday. The PBOC set the dollar-yuan central parity rate lower at 6.3659, compared with 6.3799 set on Wednesday.

BONDS: The yield on the 10-year China Government Bond was last at 2.7780%, down from 2.7900% of Wednesday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 1.42% to 3,236.70, while the CSI300 lost 1.28% to 4,209.10. The Hong Kong's Hang Seng Index tumbled 1.23% to 21,808.98.

FROM THE PRESS: China’s economy faces greater downward pressure with complex uncertainties that are greater than expected, Xinhua News Agency said following a meeting of the State Council on Wednesday chaired by Premier Li Keqiang. China should flexibly use refinancing and other monetary tools at the right time to boost support for the real economy, including greater monetary policy impact, keeping liquidity reasonable and increasing loans to small businesses, Xinhua said. China will also increase support for those businesses in difficulty, such as those in retail and tourism, including postponing their endowment insurance payments in the second quarter, as well as increasing assistance for the unemployed, Xinhua said.

China's key to dealing with its economic headwinds is promoting large projects and vigorously helping enterprises in difficulties, China Securities Journal said citing policy intentions given by the National Development and Reform Commission. Q1 growth is likely to be dragged down by increasing internal and external risks and challenges, the newspaper said. Infrastructure investment, which will be the biggest growth driver this year, is expected to expand by 5-7%, the newspaper said citing analysts. The central bank is still likely to cut interest rates and inject more liquidity via medium-term lending facilities, the newspaper said. Real estate policies will also be optimized in accordance with different cities, it said.