MNI China Press Digest Sep 16: Yuan, Lower LPR, Real Estate

The following lists highlights from Chinese press reports on Friday:

• There is no reason for an ongoing depreciation in the yuan, and the currency may rebound in Q4 as the U.S. dollar Index peaks and falls on a slower pace of Federal Reserve hikes and as China's economy rebounds, the Securities Daily reported citing analysts. The offshore yuan breached the 7 mark against the dollar on September 15, while the onshore yuan traded as low as 6.998. The yuan weakness has been driven by the U.S. dollar rally, but the yuan is relatively stable compared to currencies of other major developed economies. The economic recovery in Q3, moderate inflation, and surpluses in the current account and direct investment should support the stability of the yuan.
• Major state-owned banks’ move to cut deposit interest rates is expected to lead to a reduction in the benchmark Loan Prime Rate, the Securities Daily reported citing analysts. Though the central bank kept the rate of its medium-term lending facility, the anchor for the LPR, unchanged on Thursday, banks can submit a lower LPR quotation as the cost of liabilities fall. The central bank is also likely to lower costs by cutting the reserve requirement ratio as CNY2 trillion of medium-term lending facilities mature in Q4, the newspaper said citing Minsheng Bank chief economist Wen Bin.
• More Chinese cities, including some first-tier cities, are expected to relax or remove home purchase restrictions to prop up the housing market, the Securities Daily reported citing Tongce Research Institute research director Song Hongwei. Qingdao in Shandong province, has become the third key second-tier city to relax home purchase restrictions this month, following Ningbo and Suzhou. Only two main districts in Qingdao will continue with purchase limits, while for non-restricted areas, homebuyers are allowed to purchase more than 3 homes. Since the beginning of the year, 29 cities have relaxed restrictions on home purchases, the newspaper calculated.