MNI China Daily Summary: Wednesday, November 13
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY233 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY215.7 billion after offsetting the maturity of CNY17.3 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.7038% from 1.7261%, Wind Information showed. The overnight repo average decreased to 1.4768% from 1.5287%.
YUAN: The currency strengthened to 7.2252 to the dollar from the previous 7.2378. The PBOC set the dollar-yuan central parity rate higher at 7.1991 on Wednesday, compared with 7.1927 set on Tuesday. The fixing was estimated at 7.2436 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.0800%, up from the previous close of 2.0630%, according to Wind Information.
STOCKS: The Shanghai Composite Index edged up 0.51% to 3,439.28, while the CSI300 index rose 0.62% to 4,110.89. The Hang Seng Index lost 0.12% at 19,823.45.
FROM THE PRESS: First-tier cities are expected to scrap the distinction between ordinary and luxury homes, and lower value-added tax applied to high-end property owners, China Securities Journal reported, citing analysts. Meanwhile, local governments will likely accelerate the purchase of idle land and unsold housing using proceeds from special bonds, which will ease inventory pressure and reduce the structural liquidity risk of the sector, the newspaper said, citing analysts.
China’s State Council has announced the national holiday plan for 2025, adding lunar new year's eve and May 2 to the schedule, 21st Century Business Herald has reported. According to the Council's notice, next year will have eight days of spring festival holidays, five days for labour day and eight days for national day and mid-autumn festival.
The PBOC is likely to consider the strength of the Yuan against the U.S. dollar and a basket of currencies when setting its currency strategy following Donald Trump’s election victory, FX traders at international banks told the 21st Century Business Herald. The traders noted the central bank would monitor the yuan against other Asian currencies such as the yen and won to ensure export competitiveness. The yuan-U.S. dollar rate was unlikely to exceed 7.30 for the remainder of the year, given expectations of a Federal Reserve 25 basis-point cut in December, a trader anticipated.