MNI China Daily Summary: Tuesday, April 19

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.10%. The operation has led to a net drain of CNY10 billion after offsetting the maturity of CNY20 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 1.7357% from the close of 1.7921% on Monday, Wind Information showed. The overnight repo average fell to 1.2947% from the previous 1.3818%.

YUAN: The currency weakened to 6.3778 against the dollar from Monday's close of 6.3698. The PBOC set the dollar-yuan central parity rate lower at 6.3720, compared with 6.3763 set on Monday.

BONDS: The yield on 10-year China Government Bonds was last at 2.8475%, down from Monday's close of 2.8500%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.05% to 3,194.03, while the CSI300 index edged down 0.76% to 4,134.90. The Hong Kong's Hang Seng Index tumbled 2.28% to 21,027.76.

FROM THE PRESS: The People’s Bank of China will step up financial support for industries and companies affected by the Covid-19 outbreaks, guide banks to expand lending and share more profits with the real economy, according to a statement on its website. The central bank will provide incentive funding that is as much as 1% of the incremental balance of inclusive SME loans, and timely increase the quota of relending to agriculture and small businesses, the statement said. Banks should purchase local government bonds to support infrastructure investment, it said.

China is likely to keep April's benchmark Loan Prime Rate unchanged on Wednesday as a 25 bp RRR cut announced last Friday won't be enough to drive down banks' own lending rates, the 21st Century Business Herald said. Banks would need at least two RRR cuts and other measures to improve their liabilities before deciding to lower their LPR quotations.China's housing market may rebound in the second half of the year, as bigger cities further relax their housing policies and as the impact of the epidemic weakens, the China Securities Journal reported citing analysts. The central bank on Monday also urged local lenders to reasonably determine the minimum down payment ratio and loan interest rate, as well as support the financing needs of developers and construction companies to promote a more stable real estate market, the newspaper said. Home sales in China by area fell 13.8% y/y in the first quarter.