MNI China Daily Summary: Thursday, November 21
POLICY: The yuan's share of global payments declined in October to 2.93% from the previous month's 3.61%, but maintained its position as the fifth most active global payment currency, according to data from the Society for Worldwide Interbank Financial Telecommunication (Swift).
LIQUIDITY: The PBOC conducted CNY470.1 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY141.91 billion after offsetting the maturity of CNY328.2 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.6986% from 1.7259% on Wednesday, Wind Information showed. The overnight repo average decreased to 1.4613% from the previous 1.4752%.
YUAN: The currency strengthened to 7.2410 against the dollar, from 7.2422 at Wednesday's close. The PBOC set the dollar-yuan central parity rate lower at 7.1934, compared with 7.1935 set on Wednesday. The fixing was estimated at 7.2473 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.0000%, down from Wednesday's close of 2.0200%, according to Wind Information.
STOCKS: The Shanghai Composite Index gained 0.07% to 3,370.40, while the CSI300 index edged up 0.09% to 3,989.30. The Hang Seng Index was down 0.53% to 19,601.11.
FROM THE PRESS: The People’s Bank of China remains likely to cut the reserve requirement ratio by 0.25 to 0.5 percentage points by end-December to deal with accelerated government bond sales and fill the year-end liquidity gap, Economic Information Daily reported, citing analysts. Benchmark Loan Prime Rates are expected to remain unchanged in Q4 as the economy improves, however further reductions next year along with cuts to reverse-repo rates to promote real-estate stabilisation, price recovery and offset trade uncertainty, could not be ruled out, the daily said citing analysts.
China’s power demand in October reached 774.2 billion kilowatt hours, up 4.3% y/y, slower than the 7.6% y/y during the first 10 months of the year, data from the National Energy Administration showed. Electricity demand from the primary, secondary and tertiary industries increased 5.1%, 2.7% and 8.4%, according to the data. October consumption growth had slowed as high temperatures during August and September faded, said Wu Liqiang, director at Statistics and Data Center of the China Electricity Council.
Asset-management companies are now allowed to acquire restructured and credit-impaired assets from financial and non-financial institutions, which will support local governments to resolve debt risks, Yicai.com reported, citing a National Financial Regulatory Administration announcement. The move helps banks revitalise non-performing loans and release additional credit resources to support key national policies, with the scale of non-performing loans listed for transfer at about CNY162.7 billion in the first three quarters, a rise of 103% y/y, the newspaper said.