MNI China Daily Summary: Friday, June 14

LIQUIDITY: The PBOC conducted CNY2 billion via 7-day reverse repo on Friday, with the rates unchanged at 1.80%. The operation has led to no change to liquidity after offsetting the CNY2 billion maturity today, according to Wind Information.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8198% from 1.8146%, Wind Information showed. The overnight repo average increased to 1.7440% from 1.7323%.

YUAN: The currency weakened to 7.2557 against the dollar from 7.2520 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 7.1151, compared with 7.1122 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.2700%, down from 2.2750% at Thursday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.12% to 3,032.63 while the CSI300 index rose 0.44% to 3,541.53. The Hang Seng Index was decreased 0.94% to 17,941.78.

FROM THE PRESS: Industry insiders say China is promoting internal procedures to increase temporary tariffs on the import of large gasoline-powered cars in response to EU tariffs on Chinese-made EVs, according to an article by Yuyuan Tantian, a social media account belonging to state broadcaster CCTV. The Ministry of Commerce is also expected to announce the preliminary results of the anti-dumping investigation into imported brandy from the EU by the end of August, according to industry experts familiar with the case. With sales of European brandy declining significantly in other markets, the Chinese market has become an important consumer, the article said.

China’s top foreign exchange regulator said it will strengthen the monitoring of foreign exchange and policy reserves, further improve the management of FX reserves and steadily diversify and decentralise the allocation, said Zhu Hexin, director of the State Administration of Foreign Exchange. Authorities must also continue to deepen the two-way opening of the FX market, improve forex products and enrich currency market participants, according to Zhu.

China’s trade outlook remains complex despite last month's positive trend, He Yadong, spokesperson at the Ministry of Commerce, told reporters. He noted external demand was unstable and the sustainability of stock replenishment in major markets is still unproven. China’s exporters faced difficulties from increased geopolitical risk, trade barriers, and shipping prices, He continued. Enterprises faced uncertainty when accepting orders and fulfilling contracts, He said. (Source: 21st Century Business Herald)