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Free AccessMNI: OECD Sees Weakest Growth Outside of Pandemic Since 2008
MNI DATA TABLE: MNI China Interbank Liquidity Index (Nov) - 3
MNI China Daily Summary: Monday, September 25
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY319 billion via 14-day reverse repo, with the rate unchanged at 1.95%. The operation has led to a net injection of CNY135 billion after offsetting the maturity of CNY184 billion reverse repos today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 2.1469% from 2.1957% on Friday, Wind Information showed. The overnight repo average increased to 1.6981% from the previous 1.6941%.
YUAN: The currency weakened to 7.3109 against the dollar from 7.3002 on Friday. The PBOC set the dollar-yuan central parity rate lower at 7.1727, compared with 7.1729 set on Friday. The fixing was estimated at 7.2977 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bond was last at 2.7400%, up from Friday's close of 2.7200%, according to Wind Information.
STOCKS: The Shanghai Composite Index lost 0.54% to 3,115.61, while the CSI300 index fell 0.65% to 3,714.60. The Hang Seng Index dropped 1.82% to 17,729.29.
FROM THE PRESS: Chinese commercial banks will lower the existing mortgage rate for first-home buyers in batches on Sept 25, with an average reduction of 80bp nationwide. Lenders will not have to make any application and the new interest rate level will take effect on Monday. If this fails to curb the mortgage prepayment wave, authorities may make deeper adjustments, such as allowing new interest rates to break through the lower limit of pricing when contracts were signed, as well as including second-time home buyers to the scheme, said Xue Hongyan, vice president at Star Atlas Institute of Finance. (Source: Yicai)
The yuan still has support to remain stable with the Chinese economy continuing to recover, though a likely strong U.S. dollar could tame any significant appreciation. A stronger central parity quotation of the yuan shows regulators’ determination to stabilise the currency, while offshore yuan liquidity continues to tighten with major Chinese banks absorbing USD from the swaps market and release them in the domestic spot market, said an unnamed foreign exchange trader. The yuan may fluctuate around 7.3 against USD. (Source: China Securities Journal)
China can avoid a Japan-style balance-sheet recession by developing new growth drivers, according to Liu Shijin, former deputy director at the Development Research Center of the State Council. Speaking at the Bund Financial Summit, Liu said policymakers should implement supply-side measures to upgrade the value chain of existing industries and develop future industries driven by new technology. Entrepreneurs hold the key to innovation and China should boost the private sector by correcting ownership discrimination between state-owned and private enterprises, and allow platform companies, and large-scale tech companies to make bold investments. (Source: Yicai)
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.