MNI China Press Digest, April 24: PBOC, Monetary Policy, LGBs

     BEIJING (MNI) - The following lists highlights from Chinese press reports

on Wednesday:

     The PBOC has no plan for a targeted reserve requirement ratio cut,

according to the PBOC-run Financial News, combating rumours suggesting the

central bank will cut the RRR by one percentage point for rural commercial banks

and rural credit cooperatives from April 25. Also, media reports saying banks

will be allowed to adjust RRR based on the results of quarterly macro-prudential

assessment (MPA) are not true, the newspaper said citing the PBOC. The PBOC

noted that it will only make adjustment based on MPA at the beginning of the

year, not quarterly, the paper said.

     The PBOC should use more monetary policy tools to underpin economic growth

as the economy stabilizes, the Securities Daily said in an op-ed today. The PBOC

should establish a policy framework to implement a lower reserve requirement

ratio (RRR) for small and medium-sized banks, use the targeted medium-term

lending facility (TMLF) to replenish liquidity to the market in a timely manner,

and use substitutional RRR cuts to ease the pressure on some financial

institutions due to MLF operations, the newspaper said. 

-- Of note, the PBOC injected nearly CNY270 billion in TMLFs Weds, just the

second time its used the facility, although the total came below that expected

by many market traders.

     Local government bonds issued to individual and small/medium-sized

institutional investors via bank counters this year have fallen below par, with

three LGBs under the support price of CNY99, 21st Century Business Herald

reported. The lowest LGB priced is CNY98.65, issued by the Beijing government,

the newspaper said. This reverses the earlier popularity that the first batch of

seven LGBs selling via bank counters were sold out in 10 minutes, the newspaper

added.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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