MNI China Press Digest Aug 7: PBOC, Property, Bonds

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

Tuesday:

     The PBOC may take further measures, including counter-cyclical factors, to

maintain the stability of the forex market, China Securities Journal reported,

citing market participants. The PBOC's move to boost the reverse requirements

for forex forwards trading indicates that the yuan's exchange rate has exceeded

the preferred range, the newspaper said, citing Li Qilin, analyst of Lixuan

Securities. The return of reserve requirement for forex trading aims to

stabilise and guide market expectations, but it has not fundamentally changed

the downward trend of the yuan, the newspaper said, citing GF Securities. The

yuan still faces downward pressures due to China's economic fundamentals and

monetary policy, the newspaper said, citing Shenwan Hongyuan Securities.

     Real estate regulation will continue to be tight for a long time despite

downward pressure on China's economy and enhancing macro policies, China

Securities Journal reported. China will ensure that the funds released by more

active fiscal policy and looser monetary policy do not flood into the real

estate market, the newspaper said. China must continue to curb the excessive

growth of housing prices in major cities to prevent potential risks, the

newspaper added. China vows to get rid of reliance on real estate and land

finance to achieve economic transformation and upgrading, the newspaper said.

     Credit default risks may intensify as interest rates rise across the globe,

Securities Times said in a commentary. With Bank of England raising interest

rates and the U.S. Federal Reserve expected to do the same in September, the

PBOC shall likely follow suit, the commentary said. The rise in interest rates

will increase enterprises' cost of lending and repayments for redeeming bonds,

cultivating credit bond defaults, the commentary said. The worsening exporting

environment amid the escalating trade tensions further affects enterprises'

production and growth, which may exacerbate credit default risks, the commentary

added.

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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