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☆ Ant gets approval to expand its consumer finance business
▼ + stars: | 2023-01-04 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +1 min

BEIJING — Ant Group's consumer finance unit has received approval to more than double its registered capital, a sign of progress in resolving regulators' concerns. Since the abrupt suspension of its massive IPO in late 2020, Ant has been working with Chinese regulators to restructure its business. Ant launched its consumer finance company in 2021 as part of the restructuring. On Friday, the China Banking and Insurance Regulatory Commission said it approved Ant's request to increase the amount of registered capital for the consumer unit, to 18.5 billion yuan from 8 billion yuan. Ant will still hold a 50% stake in the consumer finance company, according to the announcement.

☆ Former PBOC official says China's digital yuan is little used - Caixin
▼ + stars: | 2022-12-29 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI, Dec 29 (Reuters) - China's central-bank digital currency is little used, a former official of the People's Bank of China (PBOC) said on Wednesday, financial news outlet Caixin reported. "The cumulative circulation of the digital yuan in the two years of the trial has been only 100 billion yuan ($14 billion)," he said. Central bank digital currencies are digital tokens, similar to cryptocurrencies, issued by central banks. "What needs to change is the digital yuan acting only as a substitute for cash and only for consumption," Xie said. To address the problem, usage of the digital yuan could be expanded - for example, by letting individuals buy financial products with it, Xie said.

As the Federal Reserve, European Central Bank, Bank of England and other Western central banks to varying degrees drained the liquidity punchbowl this year by raising rates and initiating quantitative tightening, the BOJ was on the other side with People's Bank of China filling it back up again. Liquidity support for world markets next year was always going to dwindle, but few would have had a possible BOJ halt to asset purchases on their bingo card so soon. ROCKY ROAD AHEADThis year has been one of the worst ever for world markets, hammered by multi-decade high inflation and interest rates across much of the developed world, and a rampant dollar. "The largest expansion of central bank balance sheets in history will give way to the largest contraction in history," they said. The ECB last week laid out plans to stop replacing maturing bonds from its 5 trillion euro ($5.31 trillion) portfolio.

☆ China holds benchmark lending rates for 4th consecutive month
▼ + stars: | 2022-12-20 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI, Dec 20 (Reuters) - China kept benchmark lending interest rates unchanged for the fourth consecutive month on Tuesday, matching the forecasts of most market watchers who nevertheless expect further monetary easing to prop up a slowing economy. The one-year loan prime rate (LPR) was left at 3.65%, while the five-year LPR was held at 4.30%. Market watchers regard MLF announcements as guides to any LPR changes. Xing Zhaopeng, senior China strategist at ANZ, said with rates unchanged, household spending would continue without any increase in disposable income. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

☆ China to maintain ample liquidity in 2023 to implement proactive fiscal policy - state media
▼ + stars: | 2022-12-17 | by ( ) www.reuters.com time to read: +1 min

SHANGHAI, Dec 17 (Reuters) - China will maintain reasonably ample liquidity in financial markets while better serving needs from the real economy next year, state media quoted a vice governor of the People's Bank of China (PBOC) as saying on Saturday. Monetary policy in 2023 will ensure sufficient amount of liquidity and the structure will be accurate to aid key sectors, PBOC Deputy Governor Liu Guoqiang said. "Funding cost will remain reasonably flexible, with little ups and downs," Liu was quoted by state broadcaster CCTV as saying. At the same forum, Vice Finance Minister Xu Hongcai said China will also implement a proactive fiscal policy next year, setting a reasonable deficit ratio and the size of local government special bonds. China will "appropriately expand the areas where special government bond funds can be invested and used as capital," CCTV reported Xu as saying.

Analysts polled by Reuters had predicted new yuan loans would jump to 1.35 trillion yuan in November. Household loans, including mortgages, rose to 262.7 billion yuan in November, versus a contraction of 18 billion yuan in October. Corporate loans rose to 883.7 billion yuan from 462.2 billion yuan in October. New loans totalled 19.91 trillion yuan in January-November, central bank data showed, compared with a record 19.95 trillion yuan in 2021. Outstanding yuan loans grew 11.0% in November from a year earlier compared with 11.1% growth in October.

Asian markets close the week on a solid footing, which is how they may well round off the year if financial conditions - global and local - remain as supportive as they are right now. Annual inflation in November is expected to fall to 5.1% from 5.7% in South Korea. chartThe substantial easing in U.S. financial conditions since mid-October has been crucial to this performance. Local financial conditions are also supportive. Financial conditions in Japan, South Korea and Thailand have all stayed relatively tight, almost entirely due to the appreciation of their currencies against the dollar.

☆ Analysis: China c.bank to offer limited, targeted growth support, no bazooka
▼ + stars: | 2022-12-01 | by ( Kevin Yao | ) www.reuters.com time to read: +5 min

Since 2020, when the world's second-largest economy was first jolted by the coronavirus, the PBOC has expanded its arsenal of structural policy tools, including relending and rediscount facilities and other low-cost loans. "The central bank is likely to expand the scope of structural policy tools and step up the use of such tools," said a person involved in policy discussions who spoke on condition of anonymity. Its outstanding loans made via structural tools amounted to nearly 5.6 trillion yuan ($781.64 billion) at the end of September, central bank data showed. A central bank adviser said last month that China should set a growth target no lower than 5% for next year. On Nov. 21, the central bank kept its benchmark lending rates unchanged for a third straight month.

As the coronavirus has spread in China, Beijing has imposed prolonged lockdowns in several places. The stringent COVID-19 measures also stoked rare street protests across many cities over the weekend. Reuters GraphicsThe sub-indexes for manufacturing PMI including output, employment and suppliers' delivery times all shrank in November at a faster pace than the month before, the data showed. The official manufacturing PMI largely focuses on big and state-owned firms. The private sector Caixin manufacturing PMI, which centres more on small firms and coastal regions, will be published on Thursday.

☆ Volatility in yuan spurs bets China will widen its band
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +4 min

SHANGHAI, Nov 30 (Reuters) - As macroeconomic risks induce unprecedented levels of volatility in China's yuan, investors are betting that authorities may widen the currency's tight trading band for first time since 2014 to allow market forces greater say. Day-to-day yuan volatility has been as high as 16% on some days in October, compared with a tame 1% to 4% range in the months and years before. Policy sources have told Reuters they have considered widening the trading band over the past few years to show their commitment to long-term market reforms. Rising volatility in yuan-rouble trading earlier this year prompted the central bank to double the trading band for the pair to 10% in March. Yet, most analysts who think a band widening is due also do not think it is imminent.

[1/2] Banknotes of Chinese yuan and U.S. dollar are seen in this illustration picture taken September 29, 2022. REUTERS/Florence Lo/Illustration/File PhotoLONDON/SINGAPORE, Nov 28 (Reuters) - The dollar fell sharply against Japan's yen on Monday as investors focused on rare protests in China, which pushed the yuan to a two-week low. China's onshore yuan finished the domestic session around 0.5% lower at 7.199 per dollar, the lowest close since Nov. 10. The offshore yuan fell to a more than two-week low in Asian trading and was last down 0.28% at 7.214. The Australian dollar , often used as a proxy for the yuan, slid 0.67% to $0.671.

[1/2] Banknotes of Chinese yuan and U.S. dollar are seen in this illustration picture taken September 29, 2022. China's onshore yuan finished the domestic session around 0.5% lower at 7.199 per dollar, the lowest close since Nov. 10. The offshore yuan fell to a more than two-week low in Asian trading and was last down 0.1% at 7.201. The Australian dollar , often used as a proxy for the yuan, slid 0.7% to $0.671. China's stringent COVID restrictions have taken a heavy toll on its economy, and authorities have implemented various measures to revive growth.

☆ Dollar rises, yuan slumps as China's COVID unrest spooks markets
▼ + stars: | 2022-11-28 | by ( Rae Wee | Ashitha Shivaprasad | ) www.reuters.com time to read: +3 min

[1/2] Banknotes of Chinese yuan and U.S. dollar are seen in this illustration picture taken September 29, 2022. The offshore yuan fell to an over two-week low in Asian trading, and was last roughly 0.4% lower at 7.2242 per dollar. The Australian dollar , often used as a liquid proxy for the yuan, slid more than 1% to $0.6681. China's stringent COVID restrictions have taken a heavy toll on its economy, and authorities have implemented various measures to revive growth. Against a basket of currencies, the U.S. dollar index rose 0.07% to 106.41, edging away from its recent three-month low of 105.30.

☆ Dollar gains, yuan slides as China's COVID unrest spooks markets
▼ + stars: | 2022-11-28 | by ( Rae Wee | Ashitha Shivaprasad | ) www.reuters.com time to read: +3 min

[1/2] Banknotes of Chinese yuan and U.S. dollar are seen in this illustration picture taken September 29, 2022. REUTERS/Florence Lo/Illustration/File PhotoSINGAPORE, Nov 28 (Reuters) - The dollar climbed on Monday as protests against COVID restrictions in China rattled financial markets, sending the yuan sliding and pushing nervous investors toward the safe-haven greenback. The offshore yuan fell to an over two-week low in Asian trading, and was last roughly 0.6% lower at 7.24 per dollar. The Australian dollar , often used as a liquid proxy for the yuan, slid more than 1% to $0.6687. The stringent COVID restrictions have taken a heavy toll on China's economy, and authorities have implemented various measures to revive growth.

☆ Dollar rises broadly, yuan slumps as China's COVID unrest rattles sentiment
▼ + stars: | 2022-11-28 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, Nov 28 (Reuters) - The dollar gained broadly on Monday as protests against COVID restrictions in China stoked uncertainty and dented sentiment, sending the yuan sliding and pushing nervous investors toward the safe-haven greenback. Against the offshore yuan , the dollar rose 0.76% in early Asia trade to 7.2456. The Aussie , which is often used as a liquid proxy for the yuan, fell 0.61% to $0.6714, while the kiwi slumped 0.5% to $0.6216. "Companies are currently facing weaker retail sales from a higher number of COVID cases and falling home prices from unfinished home projects." Against a basket of currencies, the U.S. dollar index was down 0.08% at 106.25, but off its recent three-month low of 105.30.

☆ Dollar gains, yuan slides as China's Covid unrest spooks markets
▼ + stars: | 2022-11-28 | by ( ) www.cnbc.com time to read: +3 min

The dollar climbed on Monday as protests against Covid restrictions in China rattled financial markets, sending the yuan sliding and pushing nervous investors toward the safe-haven greenback. Worries over the unprecedented wave of civil disobedience in a country where in-person protests are rare, the rising Covid cases, as well as how Beijing will react to the situation kept investors on edge. The offshore yuan fell to an over two-week low in Asian trading, and was last roughly 0.6% lower at 7.24 per dollar. The Australian dollar , often used as a liquid proxy for the yuan, slid more than 1% to $0.6687. The stringent Covid restrictions have taken a heavy toll on China's economy, and authorities have implemented various measures to revive growth.

HONG KONG/SHANGHAI, Nov 25 (Reuters) - China's central bank will offer cheap loans to financial firms for buying bonds issued by property developers, four people with direct knowledge of the matter said, the strongest policy support yet for the crisis-hit sector. China has stepped up support in recent weeks for the property sector, a pillar accounting for a quarter of the world's second-biggest economy. As a result of the crackdown, though, property sales and prices fell, developers defaulted on bonds and suspended construction. Chinese media reported on Monday the central bank planned to provide 200 billion yuan in interest-free relending loans to commercial banks through the end of March for housing completions. Among other recent official support, China's interbank bond market regulator said this month it would widen a programme to support about 250 billion yuan ($35 billion) of debt offerings by private firms.

☆ China cuts banks' reserve requirement ratio
▼ + stars: | 2022-11-25 | by ( ) www.cnbc.com time to read: 1 min

A man walks past the People's Bank of China (PBOC) building on July 20, 2022 in Beijing, China. China's central bank said on Friday it would cut the amount of cash that banks must hold as reserves for the second time this year, releasing about 500 billion yuan ($69.8 billion) in long-term liquidity to bolster the slowing economy. The People's Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for banks by 25 basis points (bps), effective from Dec. 5. That follows a 25-bp cut for all banks in April. This is a breaking news story, please check back later for more.

☆ Dollar headed for weekly loss as investors brace for slower Fed hikes
▼ + stars: | 2022-11-25 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The Japanese yen jumped roughly 0.7% overnight, and last bought 138.60 per dollar. Against a basket of currencies, the U.S. dollar index stood at 105.94, testing its three-month trough of 105.30 hit last week. read moreThe euro was 0.06% lower at $1.04045, but remained close to $1.0481, its highest level in over four months hit last week. The kiwi slid 0.19% to $0.6252, but that was not far off its three-month peak hit in the previous session. The New Zealand dollar was headed for a weekly gain of more than 1.5%, aided by the Reserve Bank of New Zealand's 75 bp rate hike earlier in the week and its hawkish rate outlook.

☆ China will use timely RRR cuts to keep liquidity ample -state media cites cabinet
▼ + stars: | 2022-11-23 | by ( Reuters Staff | ) www.reuters.com time to read: +4 min

BEIJING (Reuters) -China will use timely cuts in banks’ reserve requirement ratio (RRR), alongside other monetary policy tools, to keep liquidity reasonably ample, state media on Wednesday quoted a cabinet meeting as saying. Chinese Yuan banknotes are seen in this illustration taken February 10, 2020. The cabinet will send officials to provinces this month to check the implementation of policy measures that have been rolled out this year, state media said. The cabinet also called for speeding up investment and construction of major infrastructure projects, and called for stabilising and expanding consumption and vowed to support sound development of the platform economy, state media said. Deputy PBOC governor Pan Gongsheng said the bank would provide 200 billion yuan ($27.93 billion) in loans to six commercial banks for housing completions, state media Economic Daily said on Monday.

☆ Exclusive: China set to fine Ant Group over $1 billion, signalling revamp nears end-sources
▼ + stars: | 2022-11-22 | by ( Julie Zhu | ) www.reuters.com time to read: +5 min

The central bank has been in informal communication with Ant about the fine over the past few months, said three of the sources. It plans to hold more discussions with other regulators about Ant's revamp later this year and announce the fine as soon as the second quarter of next year, said a source. Ant's fine would be the largest regulatory penalty imposed on a Chinese internet company since ride-hailing major Didi Global was fined $1.2 billion by China's cybersecurity regulator in July. The fintech firm's affiliate, e-commerce titan Alibaba Group (9988.HK), last year received a record fine of 18 billion yuan ($2.51 billion) for antitrust violations. The PBOC, however, is unlikely to formally disclose the application till Ant wraps up its revamp, added the sources.

☆ China's key money rate hits near 2-year low, but softening seen fleeting
▼ + stars: | 2022-11-22 | by ( ) www.reuters.com time to read: +3 min

SHANGHAI, Nov 22 (Reuters) - Liquidity conditions in China's interbank money markets eased further on Tuesday, as cash supply far outpaced demand, despite a huge withdrawal of funds by the central bank. Traders said declines in interbank rates were largely due to looser cash conditions after financial institutions cut leverage this month. While most other major economies are raising interest rates to tame inflation, Beijing is focusing more on propping up a slowing economy by keeping money rates low. And many market participants had taken advantage of the low repo rates to fund leveraged trades in bonds, traders said. However, markets are divided whether the falls in the money rates would be sustainable.

☆ China leaves lending benchmarks unchanged for 3rd straight month in Nov
▼ + stars: | 2022-11-21 | by ( ) www.reuters.com time to read: +3 min

SHANGHAI, Nov 21 (Reuters) - China kept its benchmark lending rates unchanged for the third straight month on Monday, as a weaker yuan and persistent capital outflows continued to limit Beijing's ability to ease monetary conditions to support the economy. As expected, the one-year loan prime rate (LPR) was kept at 3.65%, while the five-year LPR was unchanged at 4.30%. The latest official data showed that overseas investors had sold their holdings of China's onshore bonds for a ninth straight month in October, the longest streak of outflows on record. "We think there's probability to lower the 5-year LPR in December due to the downturn in the property market," said Xing Zhaopeng, senior China strategist at ANZ. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

☆ China Oct new home prices fall at fastest annual pace in 7 years
▼ + stars: | 2022-11-16 | by ( ) www.reuters.com time to read: +2 min

On an annual basis, new home prices slumped 1.6%, the fastest pace since August 2015, worsening from the 1.5% year-on-year fall in September and marking the sixth month of contraction. New home prices declined 0.3% month-on-month, easing 0.2% in September, according to Reuters calculations based on National Bureau of Statistics (NBS) data. The property sector has struggled with defaults and stalled projects since authorities started to clamp down on excessive leverage in mid-2020, hitting market confidence and weighing on economic activity. Data on Tuesday also pointed to further weakness in the cash-strapped sector, showing real estate investment fell at its fastest pace in 32 months in October. A notice to financial institutions from the People's Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) outlined 16 steps to support the industry, including loan repayment extensions, sources said on Sunday.

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