MNI China Press Digest July 26:Liquidity, Grain Price, Tourism

The following lists highlights from Chinese press reports on Tuesday:

• The People’s Bank of China’s daily injections via reverse repos is becoming more flexible, which will better balance the supply and demand of short-term liquidity, the China Securities Journal reported citing analysts. The scale of reverse repos has been lowered to a few billion yuan from an integer multiple of 10 billion, and the frequency of changes has also increased, the newspaper said. The market should neither interpret the injection of CNY3 billion as a signal of tightening, nor should the injection of 12 billion yuan be understood as a signal of relaxation, the newspaper said citing Cheng Qiang, chief macro analyst of CITIC Securities. Compared with the scale of injections, the market should focus more on the interest rates of DR007, reverse repos and medium-term lending facilities, the newspaper said.
• The drastic fluctuations in international grain prices are controllable for China’s price levels, supported by its steady grain production and a bumper wheat harvest this summer, the Securities Daily reported citing analysts. Though global grain prices have recently declined, food prices still play a significant role in driving up CPI in the U.S. and euro area, the newspaper said citing analysts. China is highly self-sufficient in the three major grains and grain prices have a relatively low weight in the basket of CPI, the newspaper said citing analysts.
• The PBOC will increase support for eligible cultural and tourism enterprises to issue bonds, so to further broaden the financing channels for the sector hit hard by the Covid-19 pandemic, the Securities Daily reported citing a statement by PBOC. Currently, the financing of many asset-light companies mainly relies on bank loans, the newspaper said citing a manager of a travel agency. The PBOC will also explore the establishment of an asset and product evaluation system to support the asset revitalization of cultural and tourism enterprises, the statement said.