MNI China Daily Summary: Tuesday, April 11

POLICY: China's Consumer Price Index rose 0.7% y/y in March, 1pp off market expectations and down from February’s 1% y/y change due to higher fresh produce supply and lower energy and automobile prices, according the National Bureau of Statistics.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY5 billion via 7-day reverse repos on Tuesday, with rates unchanged at 2.00%. The operation led to a net injection of CNY3 billion after offsetting the maturity of CNY2 billion reverse repos , according to Wind Information. It aims to keep banking system liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.9845% from 1.9982% on Monday, Wind Information showed. The overnight repo average increased to 1.4214% from 1.3382%.

YUAN: The currency weakened to 6.8847 against the dollar from 6.8740 on Monday. The PBOC set the dollar-yuan central parity rate higher at 6.8882, compared with 6.8764 on Monday.

BONDS: The yield on 10-year China Government Bonds was last at 2.8500%, down from Monday's close of 2.8650%, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 0.05% to 3,313.57, while the CSI300 decreased 0.11% to 4,100.15. The Hang Seng Index edged up 0.76% to 20,485.24.

FROM THE PRESS: Several rural banks have lowered deposit rates to improve net interest margins, according to the 21st Century Herald. Acting under self-regulation mechanisms, the banks adjusted rates after higher deposit costs and lower loan rates squeezed margins. The measures do not make a LPR cut in April more likely, as credit growth nationwide in Q1 was strong, according to experts interviewed by the Herald.

The National Energy Administration has made supply and price stability of natural gas its top priority in 2023, according to Yicai news agency. At a recent conference, NEA leaders said storage capacity will increase and they will take stronger market regulation measures. Implementing national strategies needs closer coordination between provincial and central authorities, who must work with market entities, according to Yicai.

Firms will receive more support for global aspirations, with state-owned enterprises given help to expand overseas, according to Gong Zheng, Shanghai's mayor. Speaking at an executive meeting, Gong said SOEs need support to build cross-border service networks and leverage information technology to assist their internationalisation efforts. He stressed the government will prioritise supply and stable prices of agricultural commodities in 2023 and will make efforts to revitalise rural areas.