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PBOC Refrains From Injections For 14th Day

CHINA RATES

The PBOC matched maturities with injections again today, the fourteenth straight day of matching maturities, while the bank hasn't injected funds since February 25. The overnight repo rate is 17bps lower after jumping into the close yesterday, still above yesterday's intraday lows of 1.80% , but below last week's peak, last at 2.793%. 7-day repo rate has risen 30bps to 2.2069% after jumping as high at 2.75% on Monday.

  • Futures are lower, giving back after four days of gains, moves are muted compared to regional peers though. Equity markets are higher after crashing yesterday.
  • The PBOC on the wires earlier said it will keep stable and moderate loan growth. The comments came after the PBOC met with banks on credit structure, the central bank also pledged to keep consistency and stability of financial policies, as well as increasing support to tech and manufacturing.
  • Elsewhere China is expected to review lenders later this month to decide on the scale of this year's inclusive finance, which lowers qualified banks' reserve ratio requirements to subsidize lending to farmers and small businesses, the 21st Century Business Herald said citing Wang Yifeng, chief banking analyst of Everbright Securities. The market expects up to only CNY100 billion, down from record CNY400 billion last year, the Herald reported. This year's program, the fourth since its launch in 2018, may come in April when liquidity is predicted to be tight due to local bond offerings, the newspaper said.
  • US Secretary of State Blinken said that the US would not provide allies with an ultimatum over China. Blinken has taken a slightly softer line than has been seen from the Biden administration, particularly after the summit last week seemed to descend quickly to finger pointing. Blinken said the US wants to out compete China, not just defeat them. Still, tensions continue to simmer as the SEC has taken initial steps to force accounting firms to let US regulators review the financial audits of overseas companies, something China has long reviewed to do. Chinese companies face delisting in the US if they fail to comply.

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