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

CHINA PRESS: The People's Bank of China (PBOC) may cut banks' reserve

requirement ratios (RRR) for targeted sectors while also use methods involving

medium-term lending facilities (MLF), China Securities Journal said Wednesday. 

- As recent bond defaults and local governments' acceleration of bond issuance

in June could impact liquidity, the PBOC make take action to stabilize

liquidity, the newspaper said, citing various analysts, including Ming Ming,

chief fixed-income analyst of Citic Securities; 

- Because medium- and small-sized companies are under greater risks during the

deleveraging and risk control campaigns, the PBOC may direct more liquidity to

this sector, thus a RRR cut may take a targeted approach, the newspaper said; 

- A higher level of MLF will mature in June compared to April when the PBOC cut

RRR in exchange for MLF borrowing from banks, thus related RRR cut action

involving MLF is possible to reduce financing costs.