MNI China Press Digest July 8: Q3 RRR Cut, Yuan's Fx Support

The following lists highlights from Chinese press reports on Thursday:

• China may selectively cut the reserve requirement ratios for medium and small banks at the end of Q3 if the country's inflation starts to fall in July, the China Securities Journal reported citing Wen Bin, the chief researcher at Minsheng Bank. Wen, a frequent commentator on official media, was cited after the State Council said in an executive meeting on Wednesday that monetary policy tools such as RRR cuts will be used to boost financial support to the real economy. The PBOC cut RRRs of rural and urban commercial lenders by 1% over a year ago to 9.5%, compared to RRRs of major national banks at 12.5%, the newspaper said.
• The Chinese yuan will be strongly supported for steady movement in the second half should the country's forex reserves stays above USD3.2 trillion, the 21st Century Business Herald said citing analysts. The FX reserves declined for the first time in three months by USD7.8 billion to USD3.214 trillion at the end of June, mainly due to the dollar's sharp rebound, which led to declining values of non-dollar assets within the reserves, the newspaper said. The slower exports reduced trade surplus while the weakened yuan prompted businesses to delay the settling of foreign currencies, the newspaper said citing analysts.