The People's Bank of China (PBOC) is....>

CHINA PRESS: The People's Bank of China (PBOC) is very likely to cut banks'

reserve requirement ratio in a targeted direction in exchange for banks

returning medium-term lending facilities (MLF) borrowed from the central bank,

said Securities Times on Monday in a commentary.

  - A RRR cut is likely as liquidity this month will be tight during banks'

assessment tests at the end of second quarter and as large amounts of MLF will

mature, it said; 

  - However, a RRR cut will not mean the current prudent and neutral monetary

policy will be changed; rather, it is to maintain stability of banks' liquidity

and increase support for economic sectors which are in line with the

government's plans, it said; 

  - The PBOC's decision on Friday to expand collaterals for MLF to AA+ and AA

rating corporate bonds was not to loosen monetary policy. The central bank was

reacting to recent frequent defaults of corporate bonds, the newspaper said, in

a bid to boost investors' confidence in corporate bonds and reduce fear in the

market.