MNI China Press Digest Nov 8: No RRR Cut, Pump Blood, Forex

The following lists highlights from Chinese press reports on Monday:

• The PBOC is unlikely to cut banks' reserve requirement ratios or interest rates soon given growing expectations for higher inflations both within the country and globally, but will continue to reduce the financing costs of the real economy through structural monetary policy tools, the Shanghai Securities Journal reported citing Yan Se, an associate professor at Guanghua School of Management, Peking University. The PBOC will smoothen the liquidity gap by increasing reverse repos and MLFs towards year-end, the newspaper said citing analysts. MLFs valued at CNY1 trillion and CNY950 billion are to mature in November and December, respectively, along with increased maturity of reverse repos and the largest monthly sales of local government special bonds totaling CNY900 billion throughout this month, the newspaper said.
• China needs to increase policies to support businesses beset by "dire" economic conditions including the pandemic, flooding and rising costs of raw materials, the Economic Daily said in an editorial. The government should steadily "pump blood" to help companies survive, stabilize expectations with the key measure being cutting taxes and fees, the official newspaper said. Numbered over 150 million, small businesses, or the so-called market entities, employ over 700 million, and are the backbone of the economy, said the newspaper. The authorities should continue to prod financial institutions to apportion more profits to businesses and lower their capital costs, said the daily.
• China's foreign exchange reserves are steadily supported by strong exports and a net inflow of investments in its securities, the Economic Information Daily reported citing analysts. China's FX reserve rose USD17 billion to USD3.22 trillion by end-October from a month earlier due to the slightly falling U.S. dollar index and changing asset prices in major countries, the newspaper said citing Wang Chunying, spokeswoman of the State Administration of Foreign Exchange. China should be prepared to deal with internal and external shocks as the Federal Reserve began tapering and global liquidity condition risks tightening, as well as rising energy prices that increase production costs, the newspaper said citing Wen Bin, chief researcher of Minsheng Bank.