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MNI China Daily Summary: Tuesday, April 20

(MNI) LONDON

LPR: China's central bank left its key loan rate unchanged on Tuesday for the 12th straight month as it maintains a neutral policy stance amid rising inflation and a record-high leverage ratio. The Loan Prime Rate, the benchmark to set companies' cost of borrowing, remains at 3.85% for the one-year maturity and 4.65% for five-years. The move was expected as the PBOC had left the Medium-Term Lending Facility rate at 2.95% on April 15. The LPR is linked to the one-year MLF, which is viewed as being closer to market rates.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.2%. This leaves liquidity unchanged given the maturity of CNY10 billion reverse repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 2.1610% from Monday's close of 2.2167%, Wind Information showed. The overnight repo average fell to 1.8422% from 2.0752% on Monday.

YUAN: The currency strengthened to 6.4953 against the dollar from Monday's close of 6.5115. The PBOC set the dollar-yuan central parity rate lower for a sixth day at 6.5103, compared with the 6.5233 set on Monday.

BONDS: The yield on 10-year China Government Bonds was last at 3.1925%, down from Monday's close of 3.2025%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.13% to 3,472.94, while the CSI300 index lost 0.07% to 5,083.37. The Hong Kong's Hang Seng Index rose 0.10% to 29,135.73.

FROM THE PRESS: China will keep large movements in foreign capital from destabilizing its internal financial markets and suspend trading activities by foreign-held accounts if deemed necessary, the China Securities Journal reported citing Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission. China forbids illicit forex transactions and other violations, the newspaper said citing Xuan Changneng, Deputy Director of State Administration of Foreign Exchange.

The Chinese people support the government's confident approach to handling "provocations and stigmatizations" by the West over an approach driven by compromise, the Global Times reported citing a survey conducted by the newspaper. About 90% of over 1,200 respondents believe China should not "look up to the West", the government-run newspaper said. The West should also accept Chinese public opinion rather than labeling the population's brimming confidence as nationalism, the Times said.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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