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POLICY: China will increase cross-cycle policy design, introduce new policies, prevent major volatility and keep the economy operating within a reasonable range, said Li Hui, an official from the National Development and Reform Commission at a briefing on Thursday, after the August economic indicators released yesterday weakened more than expected.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.2%. The operation left liquidity unchanged given it netted off CNY10 billion reverse repos maturing today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.2634% from 2.2212% on Wednesday, Wind Information showed. The overnight repo average rose to 2.2289% from the previous 2.1449%.

YUAN: The currency weakened to 6.4447 against the dollar from 6.4351 on Wednesday. The PBOC set the dollar-yuan central parity rate lower at 6.4330, compared with the 6.4492 set on Wednesday.

BONDS: The yield on 10-year China Government Bond was last at 2.8825%, down from Wednesday's close of 2.8950%, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 1.34% to 3,607.09, while the CSI300 index decreased 1.22% to 4,807.70. Hang Seng Index fell 1.46% to 24,667.85.

FROM THE PRESS: The PBOC may intend to ensure sufficient liquidity to fully meet the demand of financial institutions, as it rolled out the matured medium-term lending facility yesterday with the same amount, higher than market expectation, the 21st Century Business Herald reported citing Zhang Xu, chief analyst of Everbright Securities. The probabilities of cutting RRRs or MLF rate may however be low, the newspaper cited Zhang as saying. PBOC's officil comment of "no big gap in the base money" last week has dispelled the market's expectation of a RRR or rate cut by the end of the year, the newspaper said. The MLF operation yesterday further dampened rate cut expectations, though it indicates the PBOC supports moderately loose liquidity in the medium and long term, which will help to further reduce the financial cost of the real economy, the newspaper said citing Wang Qing, chief analyst with Golden Credit Rating.

Sales reported by China's property developers plunged in August as regional governments toughened restrictions to prevent property bubbles, the China Securities Journal said citing company disclosures. China Merchants Shekou said its volume sold last month dropped 26% y/y while revenues declined 24%, the newspaper said. China Vanke, one of the largest developers, reported a 48% reduction in August realized contract sales volume and a 37% decline in revenue, the journal said. The last week saw new home sales in the largest cities such as Shanghai, Guangzhou and Shenzhen declining by 30%, while sales in 80% of second-tier cities fell, said the journal. Many city authorities summoned developers to meetings and ordered them not to cut prices that could lead to market disorder, said the newspaper.

China should take reciprocal actions against the British ambassador to China, and bar the British envoy from entering the Great Hall of the People in Beijing in the future, the officially run Global Times said in an editorial, referring to the site of China's legislative assembly. The editorial came after the Chinese ambassador to Britain was barred by the British parliament. China should not hesitate to strike back against "anti-China shows" staged at parliaments of western countries, often by radical members, but it needs not to respond to get entangled with them, said the newspaper. MNI noted that while the official newspaper used harsh language to denounce the UK, it also reminded readers not to overreact and further worsen China's fraught relations with the West.