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LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.2% on Tuesday. 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 2.2087% from Monday's close of 2.2356%, Wind Information showed. The overnight repo average fell to 1.7994% from 2.0433% on Monday.
YUAN: The currency strengthened to 6.4860 against the dollar from Monday's close of 6.4878. The PBOC set the dollar-yuan central parity rate higher at 6.4924, compared with the 6.4913 set on Monday.
BONDS: The yield on 10-year China Government Bonds was last at 3.2575%, up from Monday's close of 3.2500%, according to Wind Information.
STOCKS: The Shanghai Composite Index edged up 0.04% to 3,442.61, while the CSI300 index rose 0.26% to 5,090.52. The Hong Kong's Hang Seng Index decreased 0.04% to 28,941.54.
FROM THE PRESS: The worsening COVID-19 outbreak in India and the panicked reaction on global markets will have a limited spillover effect on China's financial markets as investors had previously shifted to safer assets in response to the recent weakness of the dollar index and fears of a U.S. stock market correction, the China Securities Journal reported. Chinese producers of pharmaceutical ingredients may benefit from India's shortage, it said.
China is unlikely to raise interest rates because inflation is under control despite rising commodity prices and global inflation, the 21st Business Herald reported. Monetary policy changes in emerging countries have a limited impact on China and the PBOC will maintain its strategic focus on "not making a sharp turn", it said citing Xie Yaxuan, the chief macro analyst at China Merchants Securities.
China's green goals of achieving carbon peak and neutrality by 2030 and 2060 may lead to a sharp drop in local tax revenues particularly in some resource-dependent provinces, while other provinces may need to share the low-carbon transformation costs and technologies, Caixin reported. The mining, power and construction industry accounted for as much as 48% of the revenue of Shanxi province and 39% in Inner Mongolia, while Shanghai, Beijing, Jiangsu and Zhejiang provinces account for the lowest proportion, Caixin said citing a report by Sequoia. Most of the 3,000 coal-fired generating units and 5,000 coal mines will be shut down, possibly leading to asset shelving, the newspaper said.