MNI China Press Digest, June 19: Liquidity, Virus, Mortgage

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

on Friday:

     The market is expecting the PBOC to fill in the liquidity gap created by

the issuance of special treasury bonds through conducting 28-day reverse repos

or by cutting the reserve requirement ratio (RRR), the Shanghai Securities News

reported. Many analysts believe relying solely on reverse repo operations may

not be enough to fill the funding gap, and providing long-term low-cost funds

via RRR cuts to banks can also help drive down bond yields to a reasonable

level, the newspaper said. The PBOC yesterday restarted injecting liquidity

through 14-day reverse repos for the first time since February and also cut the

operation rate by 20 bps, the newspaper added. 

     The Beijing municipal government's strict management of people travelling

out of the city does not mean closing down the capital but is a way to block

coronavirus transmission, Caixin reported citing Deputy Director of the Beijing

Public Security Bureau Pan Xuhong. Confirmed or suspected Covid-19 cases, people

who have been in the Xinfadi wholesale market since May 30 or have close contact

with the market staff, as well as those living in communities deemed as medium

and high-risk are banned from leaving Beijing. Other people in the city must

hold a negative virus test within 7 days if leaving the city is necessary, Pan

told Caixin. 

     Mortgage interest rates in China have fallen for the sixth month and rates

in second-tier cities declined faster than those in the first-tier, The Paper

reported. The average lending interest rate for first homes was 5.28% in June

nationwide, down 4 bps from May, while that for second homes fell 3 bps to 5.6%,

the newspaper said citing the Rong 360 Big Data Institute. This is mainly due to

the 10 bps cut to the 5-year LPR in April, the newspaper said citing Li Wanbin,

analyst at Rong 360. Li said that one LPR cut would generally lead to reductions

in mortgage rates for two consecutive months. 

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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