MNI China Press Digest, Dec 20: TMLF, RRR Cut, Local Gov Bonds

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

Thursday:

     The new tool rolled out by the PBOC Weds, targeted medium-term lending

facility (TMLF), can be seen as a targeted interest rate cut for small and

private companies, as it offers a lower interest rate and longer term of

maturity in comparison to the current MLF, a report published by GF Securities

today said. The tool aims to reduce the financing costs of private and small

companies. While the government also intends to stabilize the employment market

by supporting SMEs, the report said. The introduction of TMLF indicates that the

authority will adopt a neutral to slight easing in monetary policy for the year

ahead, the report said.

     China's central bank is expected to cut at least 200 basis points of

Reserve Requirement Ratio(RRR) in the next 12 months, and may also cut the open

market operations rates following the roll out of targeted medium-term lending

facility (TMLF), according to a report published by China International Capital

Corporation(CICC) today. The PBOC will ensure sufficient liquidity and is likely

to continue to guide short-term rates lower, the report said.

     Issuance of local government bonds is expected to expand next year and

which could reach CNY4.5 trillion as the authorities look to boost investment,

the Economic Information Daily said today citing analysts from Sinolink

Securities. The issuance of local governments' special bonds will also increase,

aiming to "strengthen" the economy's "weak links", such as transportation

infrastructure. The scale could reach CNY2 trillion in 2019, the report said

citing Sinolink Securities.

--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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