MNI China Press Digest June 26: Yuan, Property Loans, RRR Cut

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

Tuesday:

     The resilience of China's economy will keep the yuan stable, reported by

Shanghai Securities, citing experts. The yuan closed at 6.5433 on Monday,

recording the biggest drop since September last year, the newspaper said. The

strong US dollar and the huge policy divergence between China and the U.S. have

resulted in the fall of the yuan, said Zhang Ming, chief economist of Ping An

Securities. That said, the yuan will not drop significantly, and two-way

fluctuations between 6.1 and 6.7 should be expected over the year, said Cheng

Shi, chief economist of ICBCI, according to the newspaper. The depreciation of

the yuan mainly resulted from changes in short-term market sentiment; but the

overall trend is still determined by fundamentals of the Chinese economy, said

Guan Tao, former official of State Administration of Foreign Exchange, according

to the newspaper.

     China Development Bank (CDB) has revoked shantytown renovation loan

approval, reported the 21st Century Business Herald. CDB may pause the programme

to regulate local government liabilities, which will affect compensation for

relocated people, said an official in the fiscal system of Zhejiang Province,

according to the newspaper. CDB started to give subsidies in 2014 so that

shantytown dwellers would be able to buy existing homes rather than being

relocated to low-cost public housing. This was used to improve residents'

livelihood and cut excess urban real estate inventory, the newspaper said. 

     Reserve requirement ratio cuts do not signal a looser monetary policy,

Economic Daily stressed in a commentary after the third RRR cut this year. The

PBOC will maintain a steady and prudent monetary policy, said an unidentified

officer of the PBOC, according to the journal. Liquidity is at a reasonable and

stable level while the yuan exchange rate may fluctuate in both directions; and

under such macroscopic background, a loose monetary policy is not necessary,

said the journal. Cuttting RRR is an effective tool to promote the

debt-to-equity swap programme and to lower the financing costs of small firms,

said the journal.

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

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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