MNI China Daily Summary: Wednesday, April 15

     EXCLUSIVE: The Chinese government is trying to determine the extent of a

capital shortfall in the country's regional banks, two sources close to the

regulator told MNI, with policy advisors saying they expected a jump in the

number of official bailouts of lenders as the coronavirus outbreak puts strain

on smaller- and medium-sized business borrowers.

     TOP NEWS: The People's Bank of China (PBOC) lowered the 1-year medium-term

lending facility (MLF) rate to 2.95% from 3.15% while injecting CNY100 billion

via 1-year MLF, according to a statement on its website. This follows the 10 bps

cut back on Feb. 17.

     PBOC: The central bank today also implemented the first phase of the

reserve requirement ratio cut for selected banks announced on April 3, lowering

the rate by 50 bps for rural financial institutions and city commercial banks,

according to a statement on its website. Today's cut will release about CNY200

billion long-term funds, the statement read.

     RATES: The seven-day weighted average interbank repo rate for depository

institutions (DR007) decreased to 1.2405% from Tuesday's close 1.3946%, Wind

Information showed. Overnight repo average fell to 0.7775% from 0.9661%

yesterday.

     YUAN: The yuan weakened to 7.0617 against the dollar from Tuesday's close

7.0605. PBOC set the dollar-yuan central parity rate lower at 7.0402, compared

with 7.0406 set on Tuesday.

     BONDS: The yield on 10-year China Government Bonds was last at 2.5300%,

down from Tuesday's close of 2.5500%, according to Wind Information.

     STOCKS: The Shanghai Composite Index lost 0.57% to 2,811.17. Hong Kong's

Hang Seng Index tumbled 1.19% to 24,145.34.

     FROM THE PRESS: The PBOC is expected to conduct Targeted Medium-term

Lending Facility (TMLF) next Friday when the previous CNY267.4 billion matures,

the China Securities Journal reported citing an unnamed analyst. Easing

inflation last month gave more room for expansionary monetary policy, the

newspaper said citing Wen Bin, Chief Economist with Minsheng Bank. The PBOC

should trim the benchmark deposit rate to guide the Loan Prime Rate lower and

reduce financing costs for companies in the real economy, Wen was cited as

saying.

     China should implement increasingly proactive fiscal policies and

accelerate the issuance of infrastructure-backed local government special bonds,

according to a statement on the government website following a meeting of the

State Council executive meeting late Tuesday. Policymakers will strengthen

fiscal support for private and small companies, deploy measures to promote the

employment of college graduates, and increase shantytown renewals, the statement

read.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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