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MNI China Press Digest Sept 20: PBOC, Bonds, Food Prices

MNI picks keys stories from today's China press
Central Bank NewsPolicy NewsPBOCHomepageAPACChinaEM Policy NewsEM Central Bank NewsPeoples Bank of ChinaStoryRegion
MNI (BEIJING)

Highlights from Chinese press reports on Friday:

  • The People’s Bank of China is expected to ease banks’ liability costs by cutting rates and the reserve requirement ratio, allowing for lower existing mortgage rates and a reduction in household repayments, said Securities Times in a commentary. The Federal Reserve rate cut could allow for stronger coordination between the PBOC's purchasing of government bonds in the open market and the Ministry of Finance accelerating the issuance of treasuries, the newspaper said. Officials use of policy banks’ financial instruments and issuing additional treasuries was also possible, the news outlet noted. However, stimulus policies can be implemented progressively if the external environment continues to improve.
  • International institutions held CNY4.52 trillion of bonds in China’s interbank market at the end of August, up CNY1.34 trillion during the past 12 months, data from the PBOC showed. In terms of bond type, foreign institutions held CNY2.28 trillion of government bonds, CNY1.12 trillion of interbank deposit certificates, and about CNY950 billion of policy bonds. Wu Chaoming, vice president at the Finance and Credit Research Institute, said RMB bonds' low correlation with developed and emerging market debt yields allowed foreign investors to diversify and hedge.
  • Officials expect food prices to remain stable over the Golden Week holiday given the sufficient production capacity of live pigs, poultry and eggs, according to Jin Xiandong, spokesperson at the National Development and Reform Commission. Vegetable prices were generally stable with cucumber and rapeseed prices falling recently after a rise in August, Jin noted. The NDRC will strengthen market and price monitoring to ensure the supply and price stability of important commodities during key periods, Jin added.
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MNI (BEIJING)

Highlights from Chinese press reports on Friday:

  • The People’s Bank of China is expected to ease banks’ liability costs by cutting rates and the reserve requirement ratio, allowing for lower existing mortgage rates and a reduction in household repayments, said Securities Times in a commentary. The Federal Reserve rate cut could allow for stronger coordination between the PBOC's purchasing of government bonds in the open market and the Ministry of Finance accelerating the issuance of treasuries, the newspaper said. Officials use of policy banks’ financial instruments and issuing additional treasuries was also possible, the news outlet noted. However, stimulus policies can be implemented progressively if the external environment continues to improve.
  • International institutions held CNY4.52 trillion of bonds in China’s interbank market at the end of August, up CNY1.34 trillion during the past 12 months, data from the PBOC showed. In terms of bond type, foreign institutions held CNY2.28 trillion of government bonds, CNY1.12 trillion of interbank deposit certificates, and about CNY950 billion of policy bonds. Wu Chaoming, vice president at the Finance and Credit Research Institute, said RMB bonds' low correlation with developed and emerging market debt yields allowed foreign investors to diversify and hedge.
  • Officials expect food prices to remain stable over the Golden Week holiday given the sufficient production capacity of live pigs, poultry and eggs, according to Jin Xiandong, spokesperson at the National Development and Reform Commission. Vegetable prices were generally stable with cucumber and rapeseed prices falling recently after a rise in August, Jin noted. The NDRC will strengthen market and price monitoring to ensure the supply and price stability of important commodities during key periods, Jin added.