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Free AccessMNI China Daily Summary: Monday, March 11
POLICY: The room to cut reserve requirement ratios (RRR) has decreased in
the last two years, the People's Bank of China (PBOC) Governor Yi Gang told
reporters on Sunday. The current level is not high compared with advanced
economies after making five cuts totaling 3.5 percentage points since 2018,
Policymakers also need to consider risk prevention and good use of resources
while deciding RRR level. The PBOC will further simplify the framework of the
RRR system and treat big, medium and small banks accordingly, Yi said.
TRADE TALKS: China and the U.S. discussed how to respect each country's
monetary authority's autonomy deciding monetary policies, adhering to the
principle of letting the market decide exchange rate, living up to promises made
in each G20 summit, so as not engaging in competitive devaluation or using
exchange rate for competition and maintain close communication on FX markets, as
well as data disclosure according to IMF rules, PBOC Governor Yi told reporters.
TRADE TALKS: China and the U.S. will cancel all the extra tariffs imposed
on each other to bring trade to normal, Wang Shouwen, Vice Minister of Commerce
told reporters Saturday. Teams of negotiators are "working round the clock" to
discuss specific text of a deal, Wang added.
NPC: Regulators will encourage insurance funds to enter and support the
capital market as long-term funds, though the scale and the use of funds need to
be customized with different industries, said Zhou Liang, deputy chairman of
China Banking and Insurance Regulatory Commission (CBIRC) said on the sideline
of the Chinese People's Political Consultative Conference in Beijing, Securities
Times reported today.
DATA: China's passenger car sales in February fell 17.4% y/y to 1.219
million units, extending January's drop of 17.7%, while that of electric cars
grew by 53.6% y/y, compared with 138% in January, according to data released by
China Association of Automobile Manufacturers.
LIQUIDITY: The PBOC skipped open market operations for the eighth trading
day, leaving liquidity unchanged as no reverse repos mature, according to Wind
Information. The total liquidity in the banking system is at a reasonable and
ample level, said the PBOC.
RATE: The 7-day weighted average interbank repo rate for depository
institutions (DR007) decreased to 2.1000% from the close of 2.2988% on Friday,
Wind data showed. The overnight repo average rose to 2.0900% from 2.0454%
Friday.
Yuan: The yuan appreciated to 6.7251 against the U.S. dollar from the close
of 6.7269 on Friday. The PBOC set the dollar-yuan central parity rate lower at
6.7202 today than 6.7235 last Friday.
STOCKS: The benchmark Shanghai Composite Index rose 1.92% to 3,026.99. Hong
Kong's Hang Seng Index increased 0.97% to 28,503.30.
BONDS: The yield on the benchmark 10-year China Government Bond was last at
3.17%, up 0.5 bps from the close of Friday, according to Wind.
FROM THE PRESS: The rapid decline in the use of bill financing and
undiscounted bankers' acceptance last month was caused by the Chinese New Year,
when companies had less settlement demand and working days, reported Financial
News, a publication of the PBOC, citing an unidentified PBOC official. A more
accurate reading would combine data for the first two months, during which the
balance of bill financing added CNY685.5 billion, and undiscounted bankers'
acceptance increased by CNY68.3 billion, lending more support to the economy,
the official was cited as saying.
Regulators should strengthen the monitoring of mortgage loans, strictly
control property loans with investment and speculative intentions, as well as
stop shadow banking capitals from flowing into the real estate market, a crucial
industry for preventing financial risks, said Securities Times on Saturday
citing Wang Zhaoxing, deputy chairman of the China Banking and Insurance
Regulatory Commission.
The Chinese monetary authority intends to lower the actual rates by
liberalizing market interest rates, so future adjustment of the benchmark
deposit and lending rates will be less likely, and the benchmark rates could
even be removed eventually, Lian Ping, chief economist at Bank of
Communications, commented in China Securities Journal published on Sunday.
--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
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]
To read the full story
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.