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MNI China Press Digest Aug 6: CPI, PBOC, MLF

MNI (BEIJING)
BEIJING (MNI)

MNI picks keys stories from today's China press

Policy NewsCentral Bank NewsPBOCHomepageAPACChinaStoryEM Policy NewsAT&T Market NewsBank of America Market NewsEM Central Bank NewsPeoples Bank of ChinaPolicy StoryRegion
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Highlights from Chinese press reports on Tuesday:

  • China’s consumer prices are expected to have increased 0.2% y/y in July, as high temperatures tightened food supply and raised inflation, according to Wu Chaoming, deputy director at Caixin Research Institute. Stronger tourism and services demand and a reduction in pork supply will support CPI, Wu added. Authorities should boost demand using transfer payments to low-income groups and issue consumer vouchers to address weak inflation, said Mingming, chief economist at CITIC Securities.
  • The People’s Bank of China will use re-lending and re-discount tools to encourage financial institutions to issue special financial bonds to promote the revitalisation of rural areas, a document released by the PBOC and four other departments said. The measures will also support agricultural-related enterprises to issue financing instruments, and increase coordination among government, banks and enterprises to improve financing services, the statement said.
  • The PBOC will likely increase liquidity injections later in August to offset maturing medium-term lending facilities and meet accelerated government bond sale demand, China Securities Journal reported, citing analysts. Government bond net issuance will reach a yearly high of CNY1.6-1.8 trillion this month, according to analysts from Huaxi Securities. The PBOC should deal with the large amount of maturing MLF funds this year by increasing MLF injections or cutting the reserve requirement ratio to release medium- and long-term liquidity, the Journal said.
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Highlights from Chinese press reports on Tuesday:

  • China’s consumer prices are expected to have increased 0.2% y/y in July, as high temperatures tightened food supply and raised inflation, according to Wu Chaoming, deputy director at Caixin Research Institute. Stronger tourism and services demand and a reduction in pork supply will support CPI, Wu added. Authorities should boost demand using transfer payments to low-income groups and issue consumer vouchers to address weak inflation, said Mingming, chief economist at CITIC Securities.
  • The People’s Bank of China will use re-lending and re-discount tools to encourage financial institutions to issue special financial bonds to promote the revitalisation of rural areas, a document released by the PBOC and four other departments said. The measures will also support agricultural-related enterprises to issue financing instruments, and increase coordination among government, banks and enterprises to improve financing services, the statement said.
  • The PBOC will likely increase liquidity injections later in August to offset maturing medium-term lending facilities and meet accelerated government bond sale demand, China Securities Journal reported, citing analysts. Government bond net issuance will reach a yearly high of CNY1.6-1.8 trillion this month, according to analysts from Huaxi Securities. The PBOC should deal with the large amount of maturing MLF funds this year by increasing MLF injections or cutting the reserve requirement ratio to release medium- and long-term liquidity, the Journal said.