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     BEIJING (MNI) - The Chinese yuan edged up 6.4340 against the U.S. dollar
from Tuesday's closing at 6.4366, following a higher fixing by PBOC today.  
     PBOC set yuan central parity rate at 6.4335 vs U.S. dollar on Wednesday,
stronger than Tuesday's 6.4372. Today's fixing is the strongest since Dec. 10,
2015.
***COMMENT: MNI market sources said yuan gained at a slower pace while the
dollar index halts its plunge. The market doesn't expect PBOC interventions
given no signs of intense selling behaviors. 
     Rates fell in the interbank market after the PBOC injected net CNY100
billion by open-market operation. 
- 7-day repo average last at 2.7931%, lower than 2.8978% yesterday 
- Overnight repo average 2.7113%, lower than 2.7955% yesterday. 
     ***COMMENT: MNI market sources said liquidity in the interbank market is
tighter given businesses are paying for annual taxes and banks are making
reserve payments. Although PBOC said in its daily OMO announcements that it had
made contingent reserve arrangement (CRA), liquidity remains inadequate due to
increasing cash demand approaching the Chinese New Year holidays next month .
     Yield on 10-year China government bonds last traded 3.9500%, down from
3.9550% close yesterday: Wind Information
     ***COMMENT: A series of regulatory rules introduced this year, including
restrictions on interbank transactions, has largely discouraged the market. The
demand for the bonds is declining.
     - Shanghai Composite Index finished the morning trading session little
changed at 3,436.66
- Hong Kong's Hang Seng Index fell 0.59% to 31,715.06.
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,M$$FI$,MN$FI$,MN$FX$]