MNI China Press Digest Sep 29: FX Stability, PBOC, Premier Li

The following lists highlights from Chinese press reports on Thursday:

• Chinese regulators called on market participants to safeguard foreign exchange market stability and curb any significant movements in the yuan, the Securities Times reported citing a statement on the central bank website following a meeting of the China FX Market Self-Regulatory Framework. The meeting said the FX market is of great importance and maintaining stability is the top priority. The meeting warned against speculating on one-way yuan movements and betting on any specific currency level. Banks that offer quotes for the daily fix of the yuan against the U.S. dollar should respect the mechanism, the meeting said.
• The People’s Bank of China has launched a relending facility worth more than CNY200 billion to help manufacturers and SMEs upgrade their equipment, the China Securities Journal reported citing a statement on PBOC website. The interest rate for qualified firms will be no higher than 3.2%. Analysts expect additional new structural policy tools to be launched as they can precisely inject liquidity to certain sectors without flooding the market with excessive liquidity, the newspaper said. As of June, the PBOC had launched ten structural tools totaling CNY5.4 trillion, which may have been leveraged multiple times in the form of credit, the newspaper said.
• Both central and local governments should fully implement policies in Q4 to support the timely recovery of the economy, CCTV News reported citing Premier Li Keqiang speaking at a work meeting to stabilise growth. In response to weak demand, officials must boost investment and consumption by all means, Li was cited as saying. He urged the effective use of policy bank-backed financial instruments to accelerate infrastructure construction, and the use of special re-lending tools and fiscal discounts to upgrade equipment in manufacturing and services sectors.