Free Trial

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
Sign up now for free access to this content.

Please enter your details below and select your areas of interest.

The following lists highlights from Chinese press reports on Tuesday:

  • The Chinese yuan could further strengthen to around 6.3 against the U.S. dollar despite a possible hike in interest rates by the Federal Reserve ahead, as it is supported by robust trade and the steady recovery of the Chinese economy, the 21st Century Business Herald reported citing analysts. The PBOC has abundant monetary policy tools to curb any rapid and disorderly appreciation of the yuan, including increasing the foreign exchange deposit reserve ratio to control capital inflows, as well as releasing new QDII quotas and lowering the FX risk reserve ratio for forward forex trading to expand capital outflows, the newspaper said citing Guan Tao, a former forex official. China should increase trade settlement in yuan, increase QDII quotas, and support domestic institutions to purchase FX for foreign investment, so to ease appreciation pressure, Guan said.
  • The People’s Bank of China will keep its prudent monetary policy flexible and boost stable growth of credit to support the real economy, according to a statement on the PBOC website following a year-end meeting outlining the work for next year. The PBOC said it would aim to increase fluctuations in the Chinese yuan while keeping it stable on a reasonable and balanced level. The central bank will also improve market-based pegging of interest rates to reduce financing costs for companies, while targeting financial support for SMEs, technology innovation and carbon emission reduction, the statement said.
  • China is likely to cut more than CNY1 trillion of taxes and fees in 2020, to support SMEs, downstream manufacturers impacted by higher commodity prices and weakened demand as well as tech companies, reported citing analysts following a meeting outlining the fiscal work for next year. Meanwhile, the government will continue with a tight grip on local implicit debts while strengthening the supervision of infrastructure-backed local government special bonds, the newspaper said citing analysts. The quota of special bonds may be slightly lower than this year’s CNY3.65 trillion, and the fiscal deficit ratio may be the same as or slightly lower than the 3.2% in 2021, the newspaper said citing Professor Shi Zhengwen at China University of Political Science and Law.