MNI China Daily Summary: Tuesday, Aug 20

MNI (MNI (Beijing)) - POLICY: The People's Bank of China's has fine-tuned its language on monetary policy to “accommodative” from its previous “prudent” stance, increasing the likelihood of further easing and the chance it will guide down the reference lending rate later this year. 

LIQUIDITY: The PBOC conducted CNY149.1 billion via 7-day reverse repos, with the rate unchanged at 1.70%. The operation led to a net drain of CNY236.6 billion after offsetting maturities of CNY385.7 billion, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.7801% from 1.7315%, Wind Information showed. The overnight repo average increased to 1.7296% from 1.6910%.

YUAN: The currency weakened to 7.1419 against the dollar from 7.1383 on Monday. The PBOC set the dollar-yuan central parity rate lower at 7.1325, compared with 7.1415 on Monday. 

BONDS: The yield on 10-year China Government Bonds was last at 2.1050%, flat from Monday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.93% to 2,866.66 while the CSI300 index fell 0.72% to 3,332.70. The Hang Seng Index decreased 0.33% to 17,511.08.

FROM THE PRESS: China saw 17.2 million foreigners enter the country from January to July this year, up 129.9% y/y, according to the National Immigration Administration. In total, 5.9 million foreign tourists entered Hainan from Hong Kong and Macao using the recently-introduced visa-free policy, 21st Century Business Herald reported. Liu Haitao, deputy director at the National Immigration Administration, said Chinese-grown fruit and vegetables can now reach Europe 30 days earlier than sea transportation using train freight after fast channel inspections opened.

Sales revenue in eastern and western regions grew by 5% y/y in July, with Guangdong, Shanghai and Zhejiang up 5.8%, 5.9% and 7.8%, according to VAT invoice data released by the State Administration of Taxation. Industrial enterprises nationwide saw revenues grow 6% y/y, with high-tech industries and aviation equipment manufacturing increasing by 13.3% and 14.6%. Huang Lixin, director at the State Administration of Taxation, said the results showed China’s economy was stable and improving. (Source: Securities Daily)

The People's Bank of China and the U.S. Treasury Department agreed to strengthen further China-U.S. financial stability cooperation during a recent Financial Working Group meeting. The meeting was co-chaired by Xuan Changneng, deputy governor of the PBOC, with both sides communicating constructively on issues including financial stability and supervision, securities and capital markets, cross-border payments, and international financial governance. (Source: Yicai)