MNI China Daily Summary: Monday, December 30

     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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