MNI China Press Digest, Nov 30: Rate Cut, Reverse Repo, Growth

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

Friday:

     Market expectations for the PBOC to cut interest rates have increased

following dovish comments from Fed chief Powell, 21st Century Business Herald

reported Friday. The PBOC may not lower the deposit and loan benchmark interest

rate, but probably adjust the open market operations(OMOs) rate, the newspaper

reported, citing Shen Jianguang, chief economist at JD Finance. The PBOC could

trigger a rate cut early next year, or, if it takes the Spring Festival and Two

Sessions into consideration, perhaps it's more rational to see a cut by the end

of Q1 or the beginning of Q2. (Link to the story: https://bit.ly/2zwf7tK)

     The PBOC is unlikely to conduct large-scale reverse repos in the near

future, extending a 26-day long suspension of OMOs, the Securities Daily

reported Friday, citing Wang Qing, chief macroeconomic analyst at Dongfang

Jincheng, a credit rating agency. The PBOC has skipped OMOs for the whole of

November, as it aims to send the market a signal that liquidity will only be

loosened to a certain degree, the Daily said citing Wang. Entering December,

liquidity will pick up as local governments strive to promote infrastructure

projects, adding to fiscal expenditure and new special government bonds, the

newspaper said citing Wang. (Link to the story: https://0x9.me/NqlHz)

     Most local governments should be able to meet the annual growth target and

help hit the overall 6.5% growth for this year, the Economic Information Daily

said Friday. Currently, local governments are actively pushing infrastructure

projects, which aim to lay the foundation for next year's economic growth, said

the Daily, citing Zhang Jun, chief economist at Morgan Stanley. An issue for

2019 is to prevent a rebound in local government debt and the leverage ratio, to

avoid blind investments in infrastructure, and to focus on improving the

investment efficiency, said the paper, citing Zhang. (Link to the story:

https://0x9.me/oDYTP)

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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