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LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.2% on Wednesday. The operation left liquidity unchanged given it netted off CNY10 billion reverse repos maturing 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 1.9749% from the close of 1.9781% on Tuesday, Wind Information showed. The overnight repo average fell to 1.6910% from the previous 1.8230%.
YUAN: The currency strengthened to 6.4619 against the dollar from 6.4649 on Tuesday. The PBOC set the dollar-yuan central parity rate higher at 6.4655, compared with the 6.4610 set on Tuesday.
BONDS: The yield on the 10-year China Government Bond was last at 2.8725%, up from Tuesday's close of 2.8675%, according to Wind Information.
STOCKS: The Shanghai Composite Index rose 0.85% at 3,477.22, while the CSI300 index increased 0.90% to 4,978.85. Hang Seng Index gained 0.88% to 26,426.55.
FROM THE PRESS: The PBOC is still likely to cut banks' reserve requirement ratios to provide the market with more liquidity in the second half, as policymakers shift monetary policies to marginal loosening to offset the lack of effective demand, especially the slow recovery of consumption and investment, the 21st Century Business Herald reported citing Liu Yuanchun, the vice president of Renmin University of China. China's GDP growth may slow to 6-6.5% in Q3 and 5.4% in Q4, resulting in annual growth of about 8.2-8.5%, Liu was cited as saying. Achieve 5.5-6% growth in 2022 won't be easy, and the government should promote the implementation of key investment projects under the 14th Five-Year Plan to help stabilize growth, the newspaper said citing Liu.
China can break the united front between the U.S. and the West against China given that the West stands to gain many benefits from doing business with China, the Global Times said in an editorial. China should play down frictions with the West and talk more about the conflict with the U.S., engage in more communication with other Western countries from the perspective of cultural diversity and reduce specific friction points, the officially-run tabloid said. China should collaborate more with Western countries other than with the U.S., increase the attractiveness of the Chinese market to countries like Germany and France, it said.
Chinese consumer finance companies in many places are required to keep the annual interest rate of their products under 24% after receiving window guidance by local banking regulators in a bid to help boost the relatively weak consumption and lower financing costs, as some companies still set the rate close to 36%, the Securities Times reported citing sources. Consumer finance companies usually use the 24% or 36% upper limit of judicial protection for private lending as the reference standard for product design, while insiders believe it is still profitable for these companies to set the rate at 24% as the median capital cost in the industry should be 6% or 7%, the newspaper said.