MNI China Daily Summary: Tuesday, March 22

LIQUIDITY: The People's Bank of China (PBOC) injected CNY20 billion via 7-day reverse repos with the rates unchanged at 2.10% on Tuesday. The operation has led to a net injection of CNY10 billion after offsetting the maturity of CNY10 billion repos 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) decreased to 2.0564% from the close of 2.0949% on Monday, Wind Information showed. The overnight repo average fell to 1.9510% from the previous 1.9964%.

YUAN: The currency weakened to 6.3600 against the dollar from Monday's close of 6.3588. The PBOC set the dollar-yuan central parity rate lower at 6.3664, compared with 6.3677 set on Monday.

BONDS: The yield on 10-year China Government Bonds was last at 2.8350%, up from Monday's close of 2.8175%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.19% to 3,259.86, while the CSI300 index edged down 0.08% to 4,255.30. The Hong Kong's Hang Seng Index rallied 3.15% to 21,889.28.

FROM THE PRESS: The PBOC cut banks’ reserve requirement ratios in Q2, which will guide the Loan Prime Rateb (LPR) lower by 5 bps and rate on medium-term lending facility (MLF) by 10 bps, the Securities Daily said citing analyst Wang Qing of Golden Credit Rating. China’s inflation remains mild, leaving space for policy maneuvering, it said. More easing policies are expected after policymakers last week called for greater support for growth, it said.

China's property market is expected to stabilize by the middle of this year, as the real estate financing environment improves and more cities relax housing regulations, the PBOC-run Financial News reported citing analysts. Banks have lowered mortgage interest rates and shortened the approval process, with the rate in 103 key cities falling by 13 bps to 5.34% in March, the newspaper said. With increased external uncertainties, policymakers will have stronger determination to revitalize the market and prevent and defuse developers’ risks, the newspaper said.

China reaffirmed its commitment to large-scale tax cuts and rebates, including CNY1.5 trillion in rebates of value-added tax to help small businesses and support growth, Xinhua News Agency said citing a State Council meeting on Monday. The meeting urged the government to pay high attention to changes in the global situation, increase monetary policy support and use multiple tools to ensure liquidity and growth in credit and social finance, it said.