MNI China Daily Summary: Monday, May 23

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.1% on Monday. This keeps the liquidity unchanged after offsetting the maturity of CNY10 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) decreased to 1.5796% from 1.5839% on Friday, Wind Information showed. The overnight repo average increased to 1.3214% from the previous 1.3209%.

YUAN: The currency strengthened to 6.6634 against the dollar from 6.6740 on Friday. The PBOC set the dollar-yuan central parity rate lower at 6.6756 on Monday, compared with 6.7487 set on Friday.

BONDS: The yield on 10-year China Government Bond was last at 2.7975%, down from Friday's close of 2.8175%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.01% to 3,146.86 while the CSI300 index edged down 0.58% to 4,053.98. Hang Seng Index tumbled 1.19% to 20,470.06.

FROM THE PRESS: China's economic growth track has decelerated too fast, and the country should restore the normal life and production as soon as possible to stabilise employment, said China Economic Weekly citing Yu Yongding, former advisor to the PBOC. China should boost consumption and investment through expansionary fiscal and monetary policies, while repairing the supply chain, said Yu. Getting back to normal orders is the top priority, and higher prices can be tolerated as long as inflation is within a reasonable range, Yu was cited as saying.

China will speed up funds to safeguard employment, develop new jobs and cut and defer taxes for companies, Shanghai Securities News reported. The current difficulty lies in promoting the employment of young people, as the number of graduates hits a record high of 10.76 million but only 11 million urban new jobs are expected to be added this year, the newspaper said citing analysts. Meanwhile, young migrant workers going to cities for work continues to rise, the newspaper said noting the unemployment rate of the population aged 16 to 24 rose to 18.2% in April from 16.0%.

China’s mortgage interest rates are likely to be further lowered nationwide after the central bank cut the long-term lending reference rate, the five-year Loan Prime Rate by 15 bps to 4.45% on Friday, Beijing Business Today reported citing analysts. The minimum mortgage rate for first-time homebuyers could drop to as low as 4.25% as the PBOC earlier lowered the floor of the rate to 20 bps below the five-year LPR, the newspaper said. Currently, newly issued housing mortgages in Tianjin and Zhengzhou have followed the minimum 4.25%, while many banks in Beijing have lowered the first-time mortgage rate moderately to 5% from the previous 5.15%, the newspaper said.