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Q2 GDP Slightly Below Estimates

     BEIJING (MNI) - MNI POLICY: The People's Bank of China (PBOC) announced
rules for commercial banks to re-price existing loans with the market-oriented
reference rate, Loan Prime Rate (LPR). The move aimed to "deepen the reform of
interest rate and further promote the use of LPR," PBOC said in a statement
published on Saturday.
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market
operations, leaving liquidity unchanged, according to Wind Information. Total
liquidity in the banking system is relatively high due to an increase in fiscal
expenditures near the end of the year, PBOC said.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) increased to 2.6512% from 2.4933% on Friday, Wind
Information showed. The overnight repo average rose to 1.1058% from 1.0304% on
Friday.
     YUAN: The yuan strengthened to 6.9878 against the dollar from 6.9992 on
Friday. PBOC set the dollar-yuan central parity rate lower at 6.9805 from 6.9879
on Friday.
     BONDS: The yield on 10-year China Government Bonds was last at 3.1525%,
unchanged from the close of Friday, according to Wind Information.
     STOCKS: The Shanghai Composite Index gained 1.16% to 3,040.02 as shares of
securities companies advanced. Hong Kong's Hang Seng Index gains 0.33% to
28,319.39.
     FROM THE PRESS: China's consumer price index may surge to 5.3% in January,
driven by rising prices of fruits and vegetables before Chinese New Year,
Securities Times reported on Monday. CPI may come down in the second half of
next year due to more balanced demand and supply, the newspaper reported by
citing an analysis by Shenwan Hongyuan Securities. CPI may fall below 2.0% by
Q4, it said.
     China will focus on maintaining stability in the property market in 2020,
Beijing Business Today reported on Monday. The idea that "houses are used for
living not for speculation" has limited speculation activities and helped
develop the house leasing market in 2019, the newspaper said.
     China will speed up the development of electric vehicles and invest in
infrastructures for autos such as parking lots, the China Securities Journal
reported citing Wang Bin, vice director of the Market Operation Department under
the Ministry of Commerce.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com
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