September 06, 2022 02:27 GMT
MNI summarises the key stories from the Chinese press.
The following lists highlights from Chinese press reports on Tuesday:
- The People’s Bank of China’s cut to the foreign exchange reserve requirement ratio on Monday is an early move to curb expectations of a rapid decline of yuan against the U.S. dollar, the 21st Century Business Herald reported citing analysts. Some foreign investors have expected continued yuan depreciation as the US Dollar Index marches towards 110, and as the euro and yen hit their lowest levels in 20 years, the newspaper said citing an unnamed trader in Hong Kong. Speculators have also increased bets on a declining yuan, adding to bearish sentiment, the newspaper added. Both the onshore and offshore yuan quickly rebounded by about 200 basis points following the PBOC’s move, as some overseas investors reduced indiscriminate short selling, the newspaper said.
- The PBOC is expected to continue adding small amounts of liquidity into the financial system in the short-term, the Securities Daily reported citing analysts. The PBOC’s daily injections of CNY2 billion via reverse repos since late July signals its intent to keep liquidity reasonably ample, the Daily said. The liquidity outlook in September will be complicated by the maturity of a CNY600 billion medium-term lending facility and as banks hold onto capital ahead of end of quarter regulatory assessments, the newspaper said citing Wang Youxin, senior researcher at Bank of China. However, government spending generally increases in September, with the decline in government deposits expected to provide some support for liquidity, Wang added.
- China will strengthen funding to accelerate project construction and promote spending on vehicles, home appliances and furnishing, the China Securities Journal reported citing officials speaking at a Monday briefing. There will also be additional support for the catering and accommodation sectors. The Ministry of Finance will ensure local governments make good use of the additional CNY500 billion of special bonds to fund infrastructure construction in transportation, energy, water conservation and cold chain logistics. The National Development and Reform Commission will accelerate project selection and the release of funds to help kick off construction as soon as possible, the newspaper said citing officials.