PBOC May Not Fully Renew Aug Maturing MLF: Journal

The PBOC may not fully renew the maturing CNY700 billion MLF this month, even as the central bank is expected to inject some liquidity, the China Securities Journal said citing analyst Ming Ming of Citic Securities. The PBOC may continue to use the funds unlocked from the July RRR cut to help renew the MLF, Ming was cited saying. While another RRR cut in Q4 is possible, there isn't enough driver for an interest rate cut as expected by some market participants encouraged by the July RRR cut, the official securities newspaper said. The market may have overestimated the PBOC's loosening intention, and could face a correction should the central bank keeps the August MLF rate unchanged, the journal said.