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☆ China keeps lending benchmark rates unchanged, as expected
▼ + stars: | 2023-11-20 | by ( ) www.reuters.com time to read: +3 min

Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022. The one-year loan prime rate (LPR) was kept at 3.45% and the five-year LPR was unchanged at 4.20%. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. The steady fixings came after the central bank kept its medium-term interbank liquidity rate unchanged last week. The LPR, which banks normally charge their best clients, is set by 18 designated commercial banks who submit proposed rates to the central bank every month.

Persons: Tingshu Wang, Julian Evans, Pritchard, Winni Zhou, Tom Westbrook, Sam Holmes Organizations: People's Bank of China, REUTERS, Rights, Capital Economics, Thomson Locations: Beijing, China, Rights SHANGHAI, SINGAPORE, United States, outflows

☆ China expected to keep key lending rates unchanged next week
▼ + stars: | 2023-11-17 | by ( ) www.reuters.com time to read: +2 min

A man wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing, China, February 3, 2020. In a poll of 26 market watchers, all participants predicted both the one-year LPR and the five-year tenor would stay unchanged. "The changes in LPR are more affected by the MLF rate," Zhou said, expecting the LPR to stay unchanged this month. The PBOC on Wednesday injected 1.45 trillion yuan ($200.12 billion) worth of one-year MLF loans into the banking system but kept the rates on those loans unchanged. Expectations of steady LPR fixings also come as new bank lending in China fell less than expected in October from the previous month.

Persons: Jason Lee, Zhou Maohua, Zhou, Winni Zhou, Wu Fang, Tom Westbrook, Sam Holmes Organizations: People's Bank of China, REUTERS, Rights, China Everbright Bank, Thomson Locations: Beijing, China, Rights SHANGHAI, SINGAPORE, United States, outflows, Shanghai, Singapore

☆ China c.bank boosts liquidity injection through policy loan, rate unchanged
▼ + stars: | 2023-11-15 | by ( ) www.reuters.com time to read: +4 min

A gardener works outside the headquarters of the central bank of the People's Republic of China in Beijing October 8, 2008. REUTERS/Jason Lee (CHINA) Acquire Licensing RightsSHANGHAI/SINGAPORE, Nov 15 (Reuters) - China's central bank ramped up liquidity injection but kept the interest rate unchanged when rolling over maturing medium-term policy loans on Wednesday, matching market expectations. The central bank said the loan operation was meant to maintain banking system liquidity reasonably ample to counteract short-term factors including tax payments and government bond issuance. All 31 market watchers polled by Reuters this week had expected the central bank to inject fresh funds to exceed the maturity. The most likely outcome is for PBOC to inject more support through open market operations, while leaving the MLF rate unchanged."

Persons: Jason Lee, Carlos Casanova, corporates, Xing Zhaopeng, Winni Zhou, Tom Westbrook, Christian Schmollinger, Stephen Coates Organizations: REUTERS, Rights, People's Bank of China, Reuters, AAA, ANZ, Thomson Locations: People's Republic of China, Beijing, China, CHINA, Rights SHANGHAI, SINGAPORE, Asia, UBP, United States

☆ China keeps benchmark rates unchanged as economy finds footing
▼ + stars: | 2023-09-20 | by ( ) www.reuters.com time to read: +3 min

Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022. The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year LPR was unchanged at 4.20%. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. Despite the steady LPR, some market watchers said recent property easing measures suggest cuts to the five-year LPR and more policy stimulus are likely in coming months. China cut the one-year benchmark lending rate in August but surprised markets by keeping the five-year rate unchanged.

Persons: Tingshu Wang, Xing Zhaopeng, Xing, Wang Tao, Winni Zhou, Tom Westbrook, Sam Holmes Organizations: People's Bank of China, REUTERS, Rights, ANZ, UBS, Thomson Locations: Beijing, China, Rights SHANGHAI, SINGAPORE, United States

☆ China leaves benchmark lending rates unchanged, as expected
▼ + stars: | 2023-09-20 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Tingshu Wang/File Photo Acquire Licensing RightsSHANGHAI/SINGAPORE, Sept 20 (Reuters) - China kept benchmark lending rates unchanged at a monthly fixing on Wednesday, matching market expectations, as fresh signs of economic stabilisation and a weakening yuan reduced the need for immediate monetary easing. The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year LPR was unchanged at 4.20%. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. In a Reuters survey of 29 market analysts and traders, all participants predicted no change to the one-year LPR, while a vast majority of them also expected the five-year rate to remain steady. China cut the one-year benchmark lending rate in August but surprised markets by keeping the five-year rate unchanged.

Persons: Tingshu Wang, Xing Zhaopeng, Xing, Winni Zhou, Tom Westbrook, Sam Holmes Organizations: People's Bank of China, REUTERS, Rights, ANZ, Thomson Locations: Beijing, China, Rights SHANGHAI, SINGAPORE

☆ Chinese yuan's depreciation pressure against dollar is temporary - state media
▼ + stars: | 2023-09-19 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI/SINGAPORE, Sept 19 (Reuters) - The depreciation pressure on the Chinese yuan against the U.S. dollar is temporary, state media said on Tuesday, noting that its value against major trading partner currencies is stable. Widening yield differentials with other major economies, particularly the United States, have piled downward pressure on the Chinese currency against the dollar. "The yuan exchange rate still depends on economic fundamentals in the long run," the newspaper said in the commentary. "Financial regulators will take action when needed, resolutely correct unilateral and pro-cyclical behaviors, deal with activities that disrupts market orders, and prevent the exchange rate overshooting risks." "Based on previous FX reserve requirement ratio (RRR) reductions, the cut could ease depreciation pressure, prevent overshoot risks and boost confidence in the short term," it said.

Persons: Winni Zhou, Tom Westbrook, Shri Navaratnam Organizations: U.S ., People's Bank of China, FX, Thomson Locations: SHANGHAI, SINGAPORE, United States

☆ China boosts liquidity with medium-term policy tool
▼ + stars: | 2023-09-15 | by ( ) www.reuters.com time to read: +3 min

The headquarters of the People's Bank of China, the central bank, is pictured in Beijing, China, February 3, 2020. All 33 market watchers polled by Reuters this week predicted no change to the MLF rate. With 400 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 191 billion yuan of fresh fund injections into the banking system. It lent another 34 billion yuan via 14-day reverse repos at 1.95%, down from 2.15% previously. The rate reduction was a follow-up move to the rate cut to the seven-day tenor last month.

Persons: Jason Lee, Ken Cheung, Cheung, Marco Sun, Sun, Winni Zhou, Tom Westbrook, Tom Hogue, Shri Navaratnam, Sam Holmes Organizations: People's Bank of China, REUTERS, Rights, Reuters, Mizuho Bank, MUFG Bank, Thomson Locations: Beijing, China, Rights SHANGHAI, SINGAPORE, United States

"I used to love buying branded clothes," said teacher Zhang as she sifted through a pile of garments priced between 15 and 50 yuan ($2-$7). With wages and pensions hardly budging and the job market highly uncertain as more than one in five young Chinese remain unemployed, households' confidence and spending power are low in the barely growing economy. The real estate sector, one of the pillars of the economy, is struggling with massive debt. "One of my customers is a rich woman who used to go to Japan for shopping, but now she comes to my store," said Wang. ($1 = 7.3179 Chinese yuan renminbi)Additional reporting by Winni Zhou in Shanghai; editing by Marius Zaharia and Miral FahmyOur Standards: The Thomson Reuters Trust Principles.

Persons: Amy Zhang, Zhang, Becky Liu, Gucci, Kering, Lu, Yunshan, I've, Wang, Winni Zhou, Marius Zaharia Organizations: Standard Chartered, Thomson Locations: BEIJING, HONG KONG, China, LVMH, Japan, Shanghai

☆ Analysis: China needs more than cheaper mortgages to revive spending
▼ + stars: | 2023-09-07 | by ( ) www.reuters.com time to read: +4 min

China said last week it would cut interest rates on existing mortgages and eased rules for first-time buyers in big cities, in what the central bank and financial regulators jointly said were moves "conducive to expanding consumption." But to prevent profit margins from shrinking further, state-owned banks have also lowered deposit rates by 10-25 basis points in a coordinated move. But they also warn that a 15 basis point cut in interest rates on Chinese households' 131.4 trillion yuan of deposits reduces interest income by 197 billion per year. Mortgage rates for first homes are around 4%, while one-year fixed deposit rates are roughly 1.5%. "People don't consume because they don't have money so cutting deposit rates cannot really work."

Persons: Simon, Yu, government's, Ting Lu, Zhaopeng Xing, Li Xiao, Li, Guo, Nancy Yang, Yang, Jason Xue, Samuel Shen, Winni Zhou, Gao, Ellen Zhang, Ziyi Tang, Joe Cash, Marius Zaharia, Jacqueline Wong Organizations: Nomura, ANZ, HIT, Thomson Locations: SHANGHAI, BEIJING, Shanghai, Beijing, China, Guangdong, Wuhan

☆ Dollar firmer on solid US data; China's yuan tumbles to 16-year low
▼ + stars: | 2023-09-07 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +4 min

Japanese yen and U.S. dollar banknotes are seen with a currency exchange rate graph in this illustration picture taken June 16, 2022. China's onshore yuan , on the other hand, slid to a 16-year low versus the greenback, under pressure from a property slump, weak consumer spending, and shrinking credit growth in the world's second-largest economy. Against a basket of currencies including the euro and sterling, the dollar rose 0.2% to 105.03, after earlier touching a fresh six-month peak. The index also climbed to a six-month high on Tuesday, as the U.S. services sector unexpectedly gained steam in August. ONSHORE YUAN HITS 2007 LEVELSThe onshore yuan sank to 7.3299 per dollar, its weakest since December 2007.

Persons: Florence Lo, Brad Bechtel, BoE, Andrew Bailey, Gertrude Chavez, Dreyfuss, Joice Alves, Rae Wee, Zhou, Sharon Singleton, Chizu Nomiyama, Nick Zieminski, Andrea Ricci Organizations: U.S, REUTERS, Federal Reserve, Jefferies, Reuters, New Zealand, European Central Bank, Bank of England, Thomson Locations: U.S, New York, China, Beijing, Japan, Bank, London

☆ Dollar rises on robust U.S. economy, yuan sinks to 16-year low
▼ + stars: | 2023-09-07 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

Japanese yen and U.S. dollar banknotes are seen with a currency exchange rate graph in this illustration picture taken June 16, 2022. China's onshore yuan slid to a 16-year low, under pressure from a property slump, weak consumer spending and shrinking credit growth in the world's second-largest economy. ONSHORE YUAN HIT 2007 LEVELSThe onshore yuan sank to 7.3296 per dollar, its weakest since December 2007. The Australian dollar was about flat at $0.6384, while the New Zealand dollar rose 0.3% at $0.5885, with both languishing near their recent 10-month lows. “We see yuan staying under pressure (against the dollar) in the near term," said Becky Liu, head of China macro strategy at Standard Chartered Bank.

Persons: Florence Lo, Kirstine Kundby, Joseph Capurso, Becky Liu, BoE, Andrew Bailey, Joice Alves, Rae Wee, Zhou, Sharon Singleton, Chizu Organizations: U.S, REUTERS, U.S ., Nielsen, Danske Bank, Federal Reserve, Commonwealth Bank of Australia, New Zealand, Standard Chartered Bank, People's Bank of China, European Central Bank, Bank of England, Thomson Locations: U.S, China, Beijing, China's, Japan, Asia, Bank

☆ China to cut banks' FX reserve ratio to rein in yuan weakness
▼ + stars: | 2023-09-01 | by ( ) www.reuters.com time to read: +3 min

The headquarters of the People's Bank of China, the central bank, is pictured in Beijing, China, February 3, 2020. The People's Bank of China (PBOC) said it would cut the foreign exchange reserve requirement ratio (RRR) by 200 basis points (bps) to 4% from 6% beginning Sept. 15, according to an online statement. That would effectively free up $16.4 billion worth of foreign exchange with China's FX deposits standing at $821.8 billion at end-July. The PBOC said its move was to "improve financial institutions' ability to use foreign exchange funds". Cheung added that Friday's announcement reinforced the central bank's stance to defend a weakening yuan but was "unlikely to reverse the bearish picture of the yuan."

Persons: Jason Lee, Ken Cheung, Cheung, Winni Zhou, Tom Westbrook, Christian Schmollinger, Sam Holmes Organizations: People's Bank of China, REUTERS, Rights, Mizuho Bank, Thomson Locations: Beijing, China, Rights SHANGHAI, SINGAPORE, United States

☆ Exclusive: Chinese exporters using currency swaps to retain dollars as yuan sags
▼ + stars: | 2023-08-31 | by ( ) www.reuters.com time to read: +5 min

The swaps allow exporters to place their dollars with banks and get yuan instead, but through a contract that will eventually reverse the flows and give them back their dollars. However, while they remove a much-needed source of dollar supplies into spot yuan markets, analysts reckon Chinese monetary authorities can't really force exporters to convert dollars. When exporters swap higher-yielding dollars for the cheaper yuan for even 3 months, they get local currency for business needs and also earn a pick-up of an annualised 3.5% on the swap deal. "By trading FX swaps, exporters can postpone their settlements while meeting their yuan demand," said Becky Liu, head of China macro strategy at Standard Chartered Bank. Exporters' swaps, meanwhile, give state banks a pile of dollars to use in their yuan operations, in which they can undertake swaps to acquire the dollars from the onshore forwards market and sell them in the spot market to stem fast yuan declines.

Persons: Dado Ruvic, Ding, Gary Ng, Becky Liu, Jindong Zhang, Winni Zhou, Tom Westbrook, Vidya Ranganathan, Kim Coghill Organizations: REUTERS, Rights, U.S, Federal Reserve, Asia Pacific, Traders, Administration of Foreign Exchange, Standard Chartered Bank, China Merchants Bank, Thomson Locations: Rights SHANGHAI, SINGAPORE, U.S, Shanghai, China, Natixis, Singapore

REUTERS/Tingshu Wang/File Photo Acquire Licensing RightsSHANGHAI/SINGAPORE, Aug 25 (Reuters) - China's banks will cut deposit rates soon as part of efforts to make mortgages more affordable and revive property demand, analysts reading China's cryptic policy messages reckon. But China did not opt for a broad rate cut that would further depress banks' narrow net interest margins, instead deferring to banks to cut their deposit rates and give themselves room to cheapen mortgages, analysts said. Lowering deposit rates will give banks much needed wiggle room to cut mortgage rates. "Further reductions to the deposit rates are 'arrows on the string,'" said Wang Yifeng, banking analyst at Everbright Securities. He also expects a tweak to rules so that existing mortgage rates can be reset lower.

Persons: Tingshu Wang, Wang Yifeng, Zhu Qibing, LPR, Zhu, Lu Ting, Lu, Xing Zhaopeng, Xing, Winni Zhou, Tom Westbrook, Samuel Shen, Vidya Ranganathan, Jacqueline Wong Organizations: China Securities Regulatory Commission, REUTERS, Rights, Bankers, Everbright Securities, People's Bank of China, BOC International China, Nomura, ANZ, Thomson Locations: China, Beijing, Rights SHANGHAI, SINGAPORE, Shanghai, Singapore

☆ China surprises with modest rate cut amid growing yuan risks
▼ + stars: | 2023-08-21 | by ( ) www.reuters.com time to read: +4 min

The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.45% from 3.55% previously, while the five-year LPR was left at 4.20%. The 10 bp cut in the one-year rate was smaller than the 15 bp cut expected by most poll respondents. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. The reduction in the one-year LPR came after the People's Bank of China (PBOC) unexpectedly lowered its medium-term policy rate last week. Cheung added that the unexpected rate outcome should be "negative to China growth outlook and the yuan exchange rate".

Persons: Tingshu Wang, LPR, Masayuki Kichikawa, Ken Cheung, Cheung, Winni Zhou, Tom Westbrook, Kevin Buckland, Sam Holmes Organizations: People's Bank of China, REUTERS, Rights, Sumitomo Mitsui DS Asset Management, Mizuho Bank, Thomson Locations: Beijing, China, Rights SHANGHAI, SINGAPORE, Shanghai

☆ Yield gap between China and US widens to highest since 2007 after surprise rate cut
▼ + stars: | 2023-08-16 | by ( ) www.reuters.com time to read: +3 min

And markets widely expect the PBOC to loosen monetary policy further. But the divergent monetary policy paths between the world's two largest economies widened the yield gap to 164 basis points between China's benchmark 10-year government bonds and U.S Treasuries s - the highest since February 2007. "More broadly, recent economic data releases in China have been disappointing, while those in the U.S. have surprised to the upside." The widening yield gap reduced foreign appetite in China's onshore yuan bonds, with latest official data showing overseas investors' holding declined in July. But the expectations for further monetary easing and capital outflow risks has pressure on the Chinese yuan to depreciate further.

Persons: Janet Yellen, Mark Schiefelbein, David Chao, Eugenia Victorino, SEB, Winni Zhou, Tom Westbrook, Simon Cameron, Moore Organizations: Rights, People's Bank of China, Asia, Thomson Locations: United States, Diaoyutai, Beijing, China, Rights SHANGHAI, SINGAPORE, Invesco, U.S, Asia

☆ China central bank unexpectedly cuts rates to support sputtering economy
▼ + stars: | 2023-08-15 | by ( ) www.reuters.com time to read: +3 min

Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022. REUTERS/Tingshu Wang/File PhotoSHANGHAI/SINGAPORE, Aug 15 (Reuters) - China's central bank unexpectedly cut key policy rates for the second time in three months on Tuesday, in a fresh sign that the authorities are ramping up monetary easing efforts to boost a sputtering economic recovery. Analysts said the move opened the door to a potential cut in China's lending benchmark loan prime rate (LPR) next week. In a Reuters poll of 26 market watchers conducted this week, 20 participants, or 77%, predicted that the central bank would leave the MLF rate unchanged. The PBOC lowered key policy rates in June to prop up the broad economy, but data has been increasingly weak since.

Persons: Tingshu Wang, Tommy Wu, Ken Cheung, Winni Zhou, Rae Wee, Kim Coghill, Jamie Freed Organizations: People's Bank of China, REUTERS, Mizuho Bank, Thomson Locations: Beijing, China, SHANGHAI, SINGAPORE, United States

☆ China c.bank seen leaving policy loan rate unchanged on Tuesday
▼ + stars: | 2023-08-14 | by ( ) www.reuters.com time to read: +3 min

Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022. REUTERS/Tingshu Wang/File PhotoSHANGHAI/SINGAPORE, Aug 14 (Reuters) - China's central bank is expected to keep rates on its medium-term policy loans unchanged on Tuesday, a Reuters survey showed, despite fresh signs the economic recovery is losing momentum. The People's Bank of China (PBOC) last lowered the rate by 10 basis points to 2.65% in June. "We believe more pro-growth policies are warranted to support the economic growth, and further easing in monetary policy can be expected," analysts at BofA Global Research said. They expect a 15-basis-point cut in one-year loan prime rate (LPR) in total in the third quarter of the year.

Persons: Tingshu Wang, Li Hongwei, Zhou, Tom Westbrook, Jacqueline Wong Organizations: People's Bank of China, REUTERS, HSBC, BofA Global Research, July's, Thomson Locations: Beijing, China, SHANGHAI, SINGAPORE, United States, Shanghai, Singapore

☆ Reaction to China inflation data
▼ + stars: | 2023-08-09 | by ( ) www.reuters.com time to read: +5 min

Below are comments from analysts on the inflation data:XING ZHAOPENG, SENIOR CHINA STRATEGIST, ANZ, SHANGHAI"Both CPI and PPI in year-on-year terms fell into negative territory and confirmed economic deflation. "With destocking and credit expansion, we expect PPI and CPI will rebound from the bottom in the fourth quarter. The CPI deflation may put more pressure on the government to consider additional fiscal stimulus to mitigate the challenge." XIA CHUN, CHIEF ECONOMIST, YINTECH INVESTMENT HOLDINGS, HONG KONG"The lower inflation data reflects weak demand on the mainland, which is biggest challenge facing China's economy. It also shows China's slower-than-expected economic rebound is not strong enough to offer the weaker global demand and lift commodity prices."

Persons: XING ZHAOPENG, CHUAN, FRANCES CHEUNG, Rather, ZHIWEI ZHANG, MARCO SUN, XIA CHUN, GARY NG, Liangping Gao, Ellen Zhang, Winni Zhou, Samuel Shen, Li Gu, Sam Holmes Organizations: ANZ, CPI, PPI, OCBC, SHANGHAI, MUFG BANK, ASIA PACIFIC, Thomson Locations: BEIJING, CHINA, SHANGHAI, China, SINGAPORE, HONG KONG, Japan, Beijing, Shanghai, Hong Kong

A gentle downtrend in foreign direct investment gave way to a steep drop last quarter and inflows to China slammed to their lowest since records began 25 years ago, raising the prospect that the long-term trend is turning. Sources have told Reuters the Biden administration is likely to adopt new outbound investment restrictions on China in the coming weeks. Japan, the U.S. and Europe have already restricted the sale of high-tech chipmaking tools to Chinese companies while China has hit back by throttling exports of raw materials. To be sure, investment flows often fluctuate and many firms aren't leaving China completely or aren't leaving at all. "A lot of our clients are worried about their exposure to China as a sole country of supply."

Persons: Carlos Barria, Deng Xiaoping, Logan Wright, Biden, John Ramig, Buchalter, Daniel Seeff, Cardigan, Chi Lo, Lee Smith, Baker Donelson, Samuel Shen, Tom Westbrook, Winni Zhou, Jacqueline Wong Organizations: REUTERS, Corporate, China Markets, China's, Administration of Foreign Exchange, Investors, Reuters, Oxford Economics, Ministry of Commerce, Management, Thomson Locations: Pudong, Shanghai, SHANGHAI, SYDNEY, China, Japan, U.S, Europe, Haining, Peru, Hong Kong, Baker, Singapore

☆ Analysis-China's stubborn savers risk precipitating liquidity trap
▼ + stars: | 2023-08-04 | by ( Winni Zhou | Rae Wee | ) www.reuters.com time to read: +5 min

“Based on Japan’s experience in the 1990s, there is the risk that China is entering a liquidity trap due to the risks of balance-sheet recession,” said Natixis’s chief economist for Asia Pacific Alicia Garcia Herrero. Fan Gang, a prominent economist and former adviser to the central bank, told a forum in June that China faces a liquidity trap but not a Japan-style deflationary morass. Yet about 180 domestic A-share companies say in their stock filings that they have invested in CDs this year. China’s 220 million retail stock investors, equivalent to Brazil’s population and the biggest drivers of daily moves, have kept to the sidelines this year. “I wouldn’t pour money into the stock market any time before I see a clear rising trend,” he said.

Persons: Florence Lo, ”, Asia Pacific Alicia Garcia Herrero, “, Byron Gill, ‘, ” Gill, Betty Wang, Wu, ” Wu, John Organizations: REUTERS, Companies, Asia Pacific, Pacific Opportunities Fund, U.S, Bank, ANZ, Eastroc Beverage, China Merchants Bank, Bank of Ningbo’s Locations: SHANGHAI, SINGAPORE, Japan, China, Bank, Shanghai

Analysts see the same lack of confidence in today's Chinese households and companies that Japan grappled with in the 1990s. But in China's case there is a key difference; there is no deflationary threat yet, nor have banks switched off lending. Fan Gang, a prominent economist and former adviser to the central bank, told a forum in June that China faces a liquidity trap but not a Japan-style deflationary morass. China's policymakers have cut rates and encouraged banks to lend more in efforts to revive economic growth after the pandemic. China's 220 million retail stock investors, equivalent to Brazil's population and the biggest drivers of daily moves, have kept to the sidelines this year.

Persons: Florence Lo, Asia Pacific Alicia Garcia Herrero, Byron Gill, Gill, Betty Wang, Wu, John, Winni Zhou, Rae Wee, Vidya Ranganathan, Shri Navaratnam Organizations: REUTERS, Companies, Asia Pacific, Pacific Opportunities Fund, U.S, Bank, ANZ, Eastroc Beverage, China Merchants Bank, Bank of Ningbo's, Thomson Locations: SHANGHAI, SINGAPORE, Japan, China, Bank, Shanghai, Singapore

☆ Factbox: China's measures to slow yuan depreciation
▼ + stars: | 2023-08-01 | by ( ) www.reuters.com time to read: +4 min

Coins and banknotes of China's yuan are seen in this illustration picture taken February 24, 2022. The informal instruction, or the so-called window guidance, was meant to slow the pace of yuan depreciation, the sources said. China's yuan has lost 3.6% against the dollar to 7.16 per dollar, becoming one of the worst performing Asian currencies. ** July 20, 2023China's major state-owned banks were seen selling dollars to buy yuan in the offshore spot market in early Asian trades, sources with direct knowledge of the matter said. ** June 29, 2023China's major state-owned banks were seen selling dollars for yuan in the onshore spot foreign exchange market, sources with knowledge of the matter said.

Persons: Florence Lo, Winni Zhou, Vidya Ranganathan, Susan Fenton Organizations: REUTERS, People's Bank of China, prudential, Reuters, Thomson Locations: China

☆ China keeps lending benchmarks unchanged; economic weakness tests policymakers
▼ + stars: | 2023-07-20 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI/SINGAPORE, July 20 (Reuters) - China left its lending benchmarks unchanged on Thursday, after the central bank stood pat on a key policy rate earlier this week even as signs of a faltering economic recovery called for more stimulus. The one-year loan prime rate (LPR) was kept at 3.55%, while the five-year LPR was unchanged at 4.20%. The steady LPR fixings come as the People's Bank of China (PBOC) rolled over maturing medium-term policy loans and kept the interest rate unchanged earlier this week. The medium-term lending facility (MLF) rate serves as a guide to the LPR and markets mostly use the MLF rate as a precursor to any changes to the lending benchmarks. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

Persons: Winni Zhou, Tom Westbrook, Jacqueline Wong Organizations: United, People's Bank of China, Thomson Locations: SHANGHAI, SINGAPORE, China, United States

☆ China rolls over medium-term policy loans, rate unchanged
▼ + stars: | 2023-07-17 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI/SINGAPORE, July 17 (Reuters) - China's central bank rolled over maturing medium-term policy loans and kept the interest rate unchanged as expected on Monday, however markets expect authorities will need to unleash more stimulus to support slowing economic growth. The People's Bank of China (PBOC) said it was keeping the rate on 103 billion yuan ($14.43 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.65%. In a Reuters poll conducted last week, market participants predicted no change to the MLF rate. Traders and analysts said the rate decision was well expected after the central bank lowered key policy rates last month. With 100 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 3 billion yuan fresh fund injection into the banking system.

Persons: Goldman Sachs, Winni Zhou, Tom Westbrook, Kim Coghill, Sam Holmes Organizations: People's Bank of China, Traders, Communist Party, Goldman, Thomson Locations: SHANGHAI, SINGAPORE, United States, China

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