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MNI CHINA MARKETS: Yuan Weaker; Rates Diverged; SH Shares Down

     BEIJING (MNI) - The yuan weakened to 6.2979 against the U.S. dollar on
Monday from Friday's 6.2798 closing, following today's weaker fixing.  
     PBOC set the yuan central parity rate vs the U.S. dollar at 6.3019 on
Monday, weaker than last Friday's 6.2885.  
***COMMENT: China Industrial Bank said in a report that the yuan against the
dollar is more likely to gain, partly because companies are expected to sell
dollars ahead of Chinese New Year. Huatai Securities predicted the dollar would
continue to dip, supporting the rise of the yuan.  
     Interbank market rates diverged after PBOC's inaction in open-market
operation resulted in a net drain of CNY40 billion.
  - 7-day repo average last at 2.6961%, lower than 2.7445% Friday
  - Overnight repo average 2.5175%, up from 2.4835% yesterday.  
     Yield on 10-year China government bonds last traded 3.9100%, unchanged from
Friday's close: Wind Information.
The Shanghai Composite Index dipped 0.11% to 3458.37, while Hong Kong's Hang
Seng Index was last at 32,064.25, down 1.65%.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,M$$FI$,MN$FI$,MN$FX$]

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