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MNI China Press Digest October 11: Yuan, Zero-Covid, Inflation

MNI (Singapore)
MNI (Singapore)

The following lists highlights from Chinese press reports on Tuesday:

  • The yuan is likely to hover between 7 and 7.3 against the U.S. dollar over the rest of 2022 as expectations for higher U.S interest rates pressure the currency, the CPPCC Daily reported citing Sheng Songcheng, previously head of the statistics and analysis department at the People's Bank of China. The yuan is unlikely to keep depreciating significantly over the longer run. The PBOC can re-implement its counter-cyclical factor or increase the scale of central bank bill issuance in the offshore market to stabilize yuan, Sheng was cited as saying. It is crucial to improve the outlook for China's economy, which can greatly reduce the impact of U.S. monetary tightening, said Sheng.
  • China’s dynamic “zero-Covid” policy is sustainable and must persist as the epidemic is still spreading nationwide, with 31 provinces reporting 434 infections on Oct 9, according to a commentary by the Party-run People’s Daily. The policy does not target precisely zero infections but seeks to eliminate outbreaks immediately to prevent any spread, the newspaper said. China cannot relax its prevention measures but it must also be vigilant against excessive epidemic control and continuously improve precise measures of infection control. China’s epidemic controls are the most economical and effective, and are the best choice currently, the Daily said.
  • China’s consumer price index in September will rise close to the government's targeted 3% y/y ceiling compared to August’s 2.5% print as a low comparison base last year, coupled with significant gains in pork and vegetable prices due to holiday demand, offset declining fuel costs, the Securities Daily reported citing Golden Credit Rating chief analyst Wang Qing. The risk of high inflation is low as weak demand does not support an overall rise in prices, Wang added. The producer price index, which measures factory-gate inflation, will slow to a y/y rate of around 1.4% compared to 2.3% in August as global oil prices declined and domestic industrial product prices for steel and cement fell due to weakness in the property sector, the newspaper said citing Wang.
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