MNI China Press Digest Aug 30: Yuan, Pro-growth, Liquidity

The following lists highlights from Chinese press reports on Tuesday:

• The yuan is expected to continue to depreciate against the U.S. dollar in H2 2022, though it is likely to be a moderate, orderly and controllable process, wrote China Finance 40 Forum, a prominent think tank, citing market analysts. The People’s Bank of China will probably refrain from intervening in the currency unless a disorderly or panic-driven devaluation trend takes hold. The analysts also noted that the central bank's recent rate cuts highlighted its priority of maintaining monetary policy independence as it looks to boost economic growth, which indicates the yuan will remain more flexible. Currently, the yuan has shown relative resilience against the dollar when compared to other currencies, owing to China's robust trade exports, analysts noted.
• China will focus on stabilizing employment and prices, while keeping the economy operating within a reasonable range, CCTV News reported, citing Premier Li Keqiang, speaking at a national teleconference on Monday. Beijing has decisively launched a package of policies with greater intensity than what was seen in 2020, in order to stabilize economic growth, and it is necessary to put all of the pro-growth policies in place alongside deepening administrational reform to stimulate market vitality and nurture market players, Li said.
• Liquidity conditions in the interbank market are expected to remain ample in September, against the backdrop of limited incremental pro-growth policies and a subdued economic recovery, the Shanghai Securities News wrote, citing analysts. Even though both the DR001 and DR007 rates have risen over the last week due to increased funding needs into month-end, market liquidity will soon be supplemented after the release of fiscal expenditure at the end of August, the newspaper noted, citing analysts.