MNI Press Digest Feb 3: Yuan, Liquidity, Myanmar

The following lists highlights from Chinese press reports on Wednesday:

• The yuan may edge up as much as 3-5% against the U.S. dollar in the next two years even as the U.S. economy is expected to rebound, lifting Treasury yields, wrote Cui Li, head of macro research at CCB International Securities, in a blog published by the China Finance 40 Forum. China's trade and current account surplus as shares of GDP may stagnate this year, weakening support for the yuan rally, Cui said. He expects the central bank to guide two-way yuan movement, tighten near-term capital inflows to avoid hot money while freeing outbound investments, or restart its balance sheet expansion to hedge short-term inflows.
• The PBOC may maintain a tight funding balance and soak up excessive funds to prevent risks after demand peaks, the Securities Daily said. The central bank may postpone its scheduled 14-day reverse repo operation planned before the Lunar New Year holiday until after Feb. 4 to relieve pressure resulting from several maturing instruments, the newspaper said. The PBOC's continuous injections in recent days are a normal response to high demand before holidays and do not indicate easing, the newspaper stressed.
• Any intervention by the West in Myanmar should be moderate and prevent provoking further confrontations and tensions, the CCP-owned Global Times warned in an editorial. The newspaper warned that any forceful projections of power may not be welcomed by Myanmar or its neighboring states. The West should not complain about China's non-interference approach as the promotion of democracy should be built upon its benefits to the people of Myanmar rather than for gaining political points, the newspaper said. ASEAN countries refraining from intervening in Myanmar's internal affairs were making a practical choice based on goodwill, and the outside world should exercise patience as the situation in Myanmar develops, the editorial said.