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LIQUIDITY: The People's Bank of China (PBOC) injected CNY100 billion via 7-day reverse repos with the rates unchanged at 2.2%. The operation has led to a net injection of CNY50 billion after offsetting the maturity of CNY50 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 2.2600% from the close of 2.2461% on Thursday, Wind Information showed. The overnight repo average fell to 1.6941% from the previous 1.8253%.

YUAN: The currency weakened to 6.3913 against the dollar from 6.3894 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 6.3936 on Friday, compared with 6.3980 set on Thursday.

BONDS: The yield on the 10-year China Government Bond was last at 2.8700%, down from 2.9025% of Wednesday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index lost 0.56% to 3,564.09, while the CSI300 fell 0.74% to 4,860.13. The Hong Kong's Hang Seng Index tumbled 2.67% to 24,080.52.

FROM THE PRESS: China may reduce the issuance of local government special bonds next year, possibly CNY3.2 trillion, compared with this year's issuance quota of CNY3.65 trillion, said the Securities Daily citing Luo Zhiheng deputy research head of Yuekai Securities. With less special bonds, the deficit-to-GDP ratio must be maintained at a relatively high level of about 3.5%, said Luo. Analysts expect the Finance Ministry to front-load some of next year's quota by the end of 2021, so to help local governments better prepare for the start of major projects, the newspaper said.

China should expand the pilot program of digital yuan to more regions across the country after ensuring the smooth testing of the digital currency during the Beijing Winter Olympics, and formally launch it at the right time, said a commentary on the front page of the Economic Information Daily, penned by Dong Ximiao, chief analyst at Merchants Union Consumer Finance and a frequent contributor to state media. Digital yuan can help raise the international profile of the yuan and increase China's participation in global financial governance should the country strengthen exchanges in digital currency R&D, said Dong. Digital yuan will better protect information and financial security, said Dong, adding that less printing can also help to achieve the country's carbon neutrality goal.

China may not relax restrictions on foreign visitors soon even as it prepares for the limited opening of its borders with Hong Kong, the Global Times reported citing an anonymous Beijing-based immunologist. A quarantine-free opening to foreign visitors in the short term would have an incalculable negative impact on China, and previous outbreaks abroad have repeatedly demonstrated that cold temperatures in winter tend to cause a strong rebound in the epidemic, the expert was cited as saying. China's "zero policy" will not be adjusted even after the resumption of quarantine-free travel between the Chinese mainland and Hong Kong, and Chinese experts have not yet discussed future adjustments in China's policy, the newspaper said citing an expert from China's Center for Disease Control and Prevention who requested anonymity.

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