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MNI China Press Digest Aug 15: Yuan, PBOC, Stamp Duty

MNI (Singapore)
MNI (Beijing)

Highlights from Chinese press reports on Tuesday:

  • The People’s Bank of China may move to stabilize the yuan should the currency weaken further and breach 7.3 against the U.S. dollar. The PBOC is likely to increase the risk reserve requirement on FX forward sales, which will increase the cost of FX sales, said Yang Yiping, macro researcher at Galaxy Futures. Yang said the FX reserve requirement ratio also has room for downward adjustment. The PBOC has cut the RRR to 6% from 8% since September 2022, while the rate was once as low as 3% historically, Yang added. Onshore and offshore yuan fell to 7.26 and 7.29 on Monday respectively, both hitting the weakest level since June 30. (Source: 21st Century Business Herald)
  • The PBOC intends to support consumer finance firms and automobile finance companies in issuing financial bonds and asset-backed securities (ABS) to raise funds for developing new consumer credit products, financial news agency has reported, citing anonymous sources close to the central bank. The first batch of eight companies including Merchants Union Consumer Finance, BOC Consumer Finance, Zhongyou Consumer Finance and BYD Auto have initially communicated with CICC, CITIC Securities, and CMSC to issue around CNY50 billion of bonds and ABS. (Source:
  • China should consider abolishing stamp duty tax on A-share trading to re-activate the stock market following Hong Kong Securities Industry’s calls for removing taxes on H-shares, said Beijing Business Today in a commentary. According to the newspaper, stamp duty is no longer required to suppress speculation as stock prices are generally stable after the registration-base reform and the tax has not curbed excessive income in a market where retail investors have mainly lost money.

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