MNI China Daily Summary: Monday, June 22

     LPR: The People's Bank of China (PBOC) kept the one-year Loan Prime Rate

(LPR) unchanged at 3.85% with the five-year steady at 4.65%, according to a

statement on the bank's website. The PBOC for the second month refrained from

trimming the LPR after 20 bps cut to one-year LPR and 10 bps to five-year on

April 20.

     LIQUIDITY: The PBOC injected CNY40 billion by 7-day reverse repos and CNY80

billion by 14-day reverse repos with rates unchanged on Monday. This resulted in

a net injection of CNY120 billion as no reverse repos matured today, according

to Wind Information. The operations aim to maintain stable liquidity at the end

of the half year, the PBOC said on its website.

     RATES: The seven-day weighted average interbank repo rate for depository

institutions (DR007) increased to 2.1393% from Friday's close of 2.1340%, Wind

Information showed. The overnight repo average fell to 2.1344% from the previous

2.1349%.

     YUAN: The currency strengthened to 7.0763 against the dollar from 7.0780 on

Friday. The PBOC set the dollar-yuan central parity rate lower at 7.0865,

compared with the 7.0913 set on Friday.

     BONDS: The yield on 10-year China Government Bond was last at 2.9175%, up

from the close of 2.8650% on Friday, according to Wind Information. 

     STOCKS: The Shanghai Composite Index edged down 0.08% to 2,965.27. Hang

Seng Index lost 0.54% to 24,511.34.

     FROM THE PRESS: China requires local governments to spend CNY700 billion of

the CNY1 trillion in Special Treasury Bonds on infrastructure projects, and the

balance to counter the epidemic, the China Business News reported citing an

unnamed source. The requirements also stipulate that the return rate of

investment for projects should be no lower than 60%, and should cover the

construction of public health facilities, epidemic prevention systems, food and

energy security, as well as emergency material supplies. Projects receiving

funding should be able to use up the funds before the end of the year, the

newspaper cited the source as saying.

     The resurgence of Covid-19 cases in Beijing isn't the second wave of the

coronavirus epidemic but a sudden small-scale controllable outbreak, the Science

and Technology Daily reported citing Chinese infectious disease expert Zhang

Wenhong. Zhang previously predicted the second wave of the pandemic would start

in autumn or winter, and emphasized that the second wave would see a significant

new peak in cases before declining. The number of new local cases in Beijing

city decelerated to nine on Sunday after more than 200 cases were found in the

past over 10 days.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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