MNI China Press Digest Apr 12: Rate Cut, Yuan, Logistics

The following lists highlights from Chinese press reports on Tuesday:

• China is more likely to cut reserve requirement ratios and interest rates in Q2 judging by the loan data released Monday, the Shanghai Securities News said citing analysts. Data released yesterday indicated a lack of demand by businesses, residents and consumption, which makes pro-active policies more necessary, the newspaper said. However, the central bank’s policy space may be limited given the inversion of China-U.S. interest rate spread, so structural tools have become more important, the newspaper said.
• The yuan is more likely to see a mild weakening against the U.S. dollar instead of a sharp depreciation in the short and medium term, as China's relatively high trade surplus will offset the capital outflows in portfolio investments, the China Securities Journal reported citing analysts. Though the China-U.S. 10-year treasury bond spread turned negative for the first time since mid-2010 on Monday, the real interest rate spread is still considerable after taking inflation into account, the newspaper said citing analysts. The central parity rate of the yuan may fluctuate between 6.3 and 6.8 against the U.S. dollar this year, the Journal said citing Gao Ruidong, the chief economist at Everbright Securities.
• Chinese authorities are stepping up efforts to keep logistics flowing as restrictions imposed to control the pandemic threaten to disrupt everything from the transportation of medical goods to energy and raw materials, the 21st Century Business Herald reported citing both a notice from the State Council on Monday and other levels of the government. Local authorities should not ban roads and shipping lanes or set up quarantine testing stops along the highway, the State Council said. China’s logistics industry faces grave challenges due to the rising Covid cases, the newspaper said citing the China Federation of Logistics and Purchasing.