MNI China Daily Summary: Monday, June 9

     LIQUIDITY: The People's Bank of China (PBOC) injected CNY60 billion via

7-day reverse repos with the rate unchanged at 2.2%. The operation aims to keep

the liquidity reasonable and ample, the PBOC said in a statement on its website.

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

institutions (DR007) slightly increased to 1.9096% from Monday's close of

1.9073%, Wind Information showed. The overnight repo average fell to 1.8402%

from the previous 1.8832%.

     YUAN: The currency weakened to 7.0882 against the dollar from 7.0745 on

Monday. PBOC set the dollar-yuan central parity rate lower for a seventh day at

7.0711 compared with the 7.0882 set for Monday.

     BONDS: The yield on 10-year China Government Bond was last at 2.8400%, up

from the close of 2.8150% on Monday, according to Wind Information. 

     STOCKS: The Shanghai Composite Index rose 0.62% to 2,956.11. Hang Seng

Index rose 1.13% to 25057.22.

     FROM THE PRESS: China's economy may be restored to pre-pandemic levels and

reach 3.1% for 2020, the China Securities Journal reported citing Zhu Jianfang,

the chief economist Citic Securities. The ratio of broad fiscal deficits to

nominal GDP should be around 10%, a more expansionary fiscal policy which could

boost GDP growth by 5.6 percentage points this year. The ratio given by Zhu is

higher than estimates by market and puts China's fiscal stimulus on par with

those of European countries and the U.S, MNI noted.

     China's economic performance since May has beaten expectations and as a

result the central bank may not cut policy rates and reserve ratios as rapidly

as it did in earlier months this year, according to a commentary published by

the Securities Times. The PBOC is now leaning more on structural monetary

policies to support small-and-medium enterprises and private companies, and also

realise this year's economic development goals, the newspaper said. The PBOC may

conduct OMOs in the future with an unchanged goal of easing credits, and

significantly lowering borrowing costs for companies in the real economy, the

commentary said.

     The average May CPI estimate by 19 Chinese financial institutions was 2.9%,

lower than 3.3% in April, and will continued to ease this year as pork prices

fell from the peak, China Securities Journal reported citing Li Chao, chief

analyst with Zheshang Securities. May's lower CPI increased the possibility for

the central bank to cut the benchmark interest rate for deposits and also rates

for MLF, Li was cited saying. CPI for May will be released on Wednesday.

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

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

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]