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☆ China keeps key lending rate unchanged as policymakers balance yuan, economic risks
▼ + stars: | 2022-11-15 | by ( ) www.reuters.com time to read: +3 min

"Keeping policy rates stable will help curb widening interest rate differentials between China and the United States and stabilise FX market expectations." With 1 trillion yuan worth of MLF loans set to expire on the same day, the operation resulted in a net 150 billion yuan medium-term cash withdrawal through the instrument. The central bank said the latest operation was aimed at counteracting higher cash demand due to tax payments and keeping "banking system liquidity reasonably ample". Separately, the central bank also injected 172 billion yuan through seven-day reverse repos while keeping borrowing costs unchanged at 2.00%, compared with 2 billion yuan worth of such loans expiring on the same day. The central bank will "continue to maintain ample liquidity, but chances for an interest rate cut are low," he said.

The plan comes as the cash-strapped sector has struggled with defaults and stalled projects, hitting market confidence and weighing on the world's second-largest economy. Policymakers' previous efforts to help financing has done little to bolster the property market. The Hang Seng Mainland Properties Index (.HSMPI) jumped 16.2%, with the share prices of many Chinese property developers posting double-digit gains. The notice "introduced by far the most comprehensive set of support measures for the ailing property market," it said. Some investors remained cautious about the impact of the latest policy, however, as regulators have already made many attempts to revive the property sector and the macro environment remains weak amid the country's COVID restrictions.

☆ China plan to restore sector liquidity boosts property stocks
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: +1 min

HONG KONG, Nov 14 (Reuters) - Chinese property stocks soared on Monday as the market cheered an aggressive plan outlined by Chinese regulators to shore up liquidity in the embattled sector, with the sub-index surging close to a two-month high in early trading. The Hang Seng Mainland Properties Index (.HSMPI) gained 15%, while top property developers Country Garden (2007.HK) soared 33%, narrowing gains after rallying as much as 52% to the highest since July 27. Longfor Group (0960.HK), Agile Group (3383.HK), R&F Properties (2777.HK), Logan Group (3380.HK) and KWG Group (1813.HK) all jumped almost 30%. Two sources told Reuters 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, in a major push to ease a deep liquidity crunch that has plagued the property sector since mid-2020. Reporting by Clare Jim; Editing by Ana Nicolaci da Costa and Bradley PerrettOur Standards: The Thomson Reuters Trust Principles.

☆ China's property shares jump as regulators outline new financing package
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: +1 min

HONG KONG, Nov 14 (Reuters) - Chinese property stocks soared on Monday as the market cheered a new aggressive financing package outlined by Chinese regulators to shore up the liquidity of its embattled property sector, with the shares of many major companies surging over 14%. Large property developers Country Garden (2007.HK), Longfor Group (0960.HK), CIFI Holdings (0884.HK) and Greentown China (3900.HK) all jumped close to 15% at market open. The Hang Seng Mainland Properties Index (.HSMPI) gained 9.7%. Two sources told Reuters 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, in a major push to ease the deep liquidity crunch which has plagued the property sector since mid-2020. Reporting by Clare Jim; Editing by Ana Nicolaci da CostaOur Standards: The Thomson Reuters Trust Principles.

☆ China regulators order more financing support for property firms
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: +4 min

The move, first reported by Bloomberg, comes as cash-strapped property developers struggle to tap sources of funding to finish projects and pay suppliers. Chinese regulators are telling financial institutions to allow real estate companies to defer repayment of some loans, such as property development and trust loans, the sources said. China's property sector, once a pillar of growth, has slowed sharply this year as the government sought to restrict excessive borrowing by developers. Goldman Sachs said in a note that the basic principles of the property measures are not new. Chinese regulators expanded a key financing support programme designed for private firms, including real estate companies, to about 250 billion yuan ($35.18 billion) this week.

☆ China regulators urge more financing support for property firms -sources
▼ + stars: | 2022-11-13 | by ( ) www.reuters.com time to read: 1 min

BEIJING, Nov 13 (Reuters) - Chinese regulators have asked financial institutions to extend more support to property developers to shore up the sector, two sources with direct knowledge of the matter said on Sunday. A notice to the institutions from the People's Bank of China and the China Banking and Insurance Regulatory Commission covered 16 steps, such as loan repayment extensions, in a major push to ease a deep liquidity crunch since the summer of 2020. The PBOC and CBIRC did not immediately respond to Reuters requests for comment. Reporting by Liangping Gao and Ryan Woo; Editing by Clarence FernandezOur Standards: The Thomson Reuters Trust Principles.

Chinese banks are estimated to have issued 800 billion yuan($110.4 billion) in net new yuan loans last month, falling sharply from 2.47 trillion yuan in September, according to the median estimate in the survey of 27 economists. That would be lower than the 826.2 billion yuan issued in the same month a year earlier. In October, the People's Bank of China made 154.3 billion yuan in loans to three policy banks via its PSL facility, central bank data showed. Outstanding yuan loans were expected to grow by 11.2% in October from a year earlier, unchanged from September, the poll showed. China's local governments issued a net 24.1 billion yuan in special bonds in September, the finance ministry has said, down from 51.6 billion yuan in August.

☆ China's factory gate prices suffer first drop since Dec 2020 as COVID curbs take toll
▼ + stars: | 2022-11-09 | by ( Anant Chandak | Tetsushi Kajimoto | ) www.reuters.com time to read: +4 min

The consumer inflation also moderated from a 29-month high in September, and underlying price pressures remained much more modest with core inflation rising 0.6% in October, unchanged from September. "However, the worsening of global growth is denting external demand." Reuters Graphics Reuters GraphicsPOLICY CHALLENGEThe consumer price index climbed 2.1% from a year earlier, easing from a 29-month high of a 2.8% increase in September, mainly driven by falling food prices. Food prices rose 7.0% in annual terms, slowing from 8.8% rise in the previous month, with fresh vegetable prices off 8.1% from a 12.1% rise in September. However, Pork prices - a key driver of the CPI - rose 51.8% year-on-year in October, faster than 36% growth in September.

☆ China's factory gate prices drop for first time since Dec 2020 as COVID curbs take toll
▼ + stars: | 2022-11-09 | by ( Anant Chandak | Tetsushi Kajimoto | ) www.reuters.com time to read: +4 min

☆ China vows commitment to growth as investors bet on easier COVID policy
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +6 min

Even though case numbers are rising and disruptive lockdowns continue with no clear exit strategy in sight, investors latched on to hope that China may ease its strict COVID policy in the coming months. Renewed COVID lockdowns are weighing heavily on China's business activity and consumer confidence. read moreOPEN-DOOR POLICYYi Gang, governor of the People's Bank of China (PBOC), said China will continue to deregulate its markets. While other countries have been tightening policy to battle rising prices, China has implemented an accommodative monetary policy to shore up sputtering growth, raising concerns about capital flight. With China's zero-COVID policy expected to remain in place through at least the winter, or longer, its near-term growth outlook is bleak.

☆ China vows commitment to growth as pressure on economy mounts
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +5 min

Renewed COVID lockdowns are weighing heavily on China's business activity, consumer confidence and financial markets, adding to a sharp downdraft on the global economy from surging inflation and rising interest rates. OPEN-DOOR POLICYYi Gang, governor of the People's Bank of China (PBOC), said China will continue to deregulate its markets. With China's zero-COVID policy expected to remain in place through at least the winter, or longer, its near-term growth outlook is bleak. After surprisingly high gross domestic product growth of 3.9% in the third quarter, Nomura expects growth to drop again, with zero or even negative sequential growth from the previous quarter. "We maintain our GDP growth forecast of 2.8% year-on-year for the fourth quarter with a corresponding sequential growth forecast at 0.0%."

☆ China will support Pakistan in stabilising its financial situation - Xi
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +2 min

BEIJING, Nov 2 (Reuters) - China will continue to support Pakistan as it tries to stabilise its financial situation, state media quoted President Xi Jinping as saying on Wednesday, during a visit by Pakistan's prime minister to Beijing. Pakistan was expected to seek debt relief from China, particularly the rolling over of bilateral debt of around $23 billion. China has been involved in major mining and infrastructure projects in Pakistan, including the deep-water Gwadar port, all part of the $65 billion China-Pakistan Economic Corridor (CPEC). China will also export technology for a 160 km/h high-speed railway train to Pakistan, state broadcaster CCTV said on Wednesday. China welcomes Pakistan to expand high-quality agricultural exports to the country, and is willing to deepen cooperation in areas including the digital economy, e-commerce, photovoltaic and other new energy sources, Xi said.

Investors face another (likely) bumper U.S. rate hike from the Fed later this week, and profit-taking and re-positioning as the new month begins could also burst the revival bubble. And not all equity markets are smiling - MSCI's Asia ex-Japan index is almost certain to close in the red for an unprecedented 10th month in a row. The divergence between U.S. and Asian markets is also reflected in the historic levels of dollar/Asia exchange rates, the widening gap between the U.S. and Chinese economic outlooks, and general investor confidence in the Fed versus Asian central banks' policy path. The PBOC is also struggling to keep its exchange rate depreciation in check. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

[1/2] People buy food at stalls promoting China's digital yuan, or e-CNY, during the 2022 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 1, 2022. REUTERS/Tingshu WangHONG KONG/SHANGHAI, Oct 27 (Reuters) - China's digital yuan took the centre stage in the world's largest cross-border central bank digital currency (CBDC) trial to date, a report showed, pointing to how Beijing is speeding up yuan globalization efforts amid rising geopolitical tensions. China's digital currency, or e-CNY, was the most issued, and actively transacted token in the $22 million pilot that used CBDCs to settle cross-border trades, a Bank of International Settlement (BIS) report showed. The PBOC's participation in m-Bridge represents its ambition to eventually promote global, wholesale use of the e-CNY. But China's yuan internationalisation, digital or not, faces challenges amid a slowing economy ravaged by COVID flare-ups, and a property debt crisis.

☆ China makes it easier for firms to borrow from overseas as yuan drops
▼ + stars: | 2022-10-25 | by ( ) www.reuters.com time to read: +1 min

SHANGHAI, Oct 25 (Reuters) - China's central bank and foreign exchange regulator on Tuesday raised the cross-border macro prudential adjustment ratio for corporates and financial institutions, making it easier for domestic firms to raise funds from overseas markets. The People's Bank of China (PBOC) said in a statement it raised a parameter on cross-border corporate financing under its macro-prudential assessments to 1.25 from 1. The move, which reverses a previous adjustment in 2021 to tighten overseas financing, comes at a time the Chinese yuan faces renewed depreciation pressure. The yuan has lost 13% against a buoyant dollar so far and looks set for the biggest annual drop since 1994, when China unified market and official rates. Register now for FREE unlimited access to Reuters.com RegisterReporting by Beijing Newsroom; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

MUMBAI, Oct 25 (Reuters) - The Indian rupee is expected to open slightly lower versus the dollar on Tuesday after the offshore Chinese yuan tumbled to a lifetime low. The rupee is tipped to open at around 82.74-82.76 per U.S. dollar, compared with 82.6750 on Friday. Meanwhile, the dollar index dipped in Asia trading, adding to is recent losses on bets that the U.S. Federal Reserve will deliver a small rate hike in December. If it were not for yuan, the rupee would have had "had a decent opening" considering the "slightly less" hawkish Fed outlook, a trader at a Mumbai-based bank said. Another fall in India's foreign exchange "is probably another problem" for the rupee, the trader said.

☆ BOJ steps up, Boris bows out, Xi stays put
▼ + stars: | 2022-10-24 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Tingshu WangA look at the day ahead in European and global markets from Wayne Cole. BOJ boss Kuroda has so far shown no sign of reversing course ahead of retirement next year and markets might have to wait for a new face to see the end of YCC. A, sort of, new face is a step closer to being British PM after Boris Johnson bowed out of the leadership race, leaving former FinMin Rishi Sunak in pole position. Beijing marked the rubber-stamping of Xi for a third term as leader by dumping a week of delayed data on markets, and a mixed bunch it was. Topping forecasts were GDP and industrial output, but retail sales disappointed and house prices kept falling in a warning sign for the stretched property sector.

☆ Morning Bid: BOJ steps up, Boris bows out, Xi stays put
▼ + stars: | 2022-10-24 | by ( ) www.reuters.com time to read: +2 min

A banknote of Japanese yen is seen in this illustration picture taken June 15, 2022. REUTERS/Florence Lo/Illustration/File PhotoA look at the day ahead in European and global markets from Wayne Cole. A, sort of, new face is a step closer to being British PM after Boris Johnson bowed out of the leadership race, leaving former FinMin Rishi Sunak in pole position. Beijing marked the rubber-stamping of Xi for a third term as leader by dumping a week of delayed data on markets, and a mixed bunch it was. Topping forecasts were GDP and industrial output, but retail sales disappointed and house prices kept falling in a warning sign for the stretched property sector.

BEIJING/HONG KONG, Oct 22 (Reuters) - China's central bank chief Yi Gang is likely to step down after he was dropped from an elite body of the ruling Communist Party, with a former central banker a leading contender to succeed him, sources close to the central bank said. Yi is among pro-reform policymakers not named on Saturday as full or alternate members of the party's new Central Committee. Also excluded were outgoing Premier Li Keqiang, 67, economic czar Liu He, 70, and central bank party chief Guo Shuqing, 66. Yin Yong, deputy party chief in the capital Beijing who worked as a deputy central bank governor from 2016 to 2018, is a leading candidate to replace Yi, sources close to the central bank said. Xuan Changneng was named deputy central bank governor on Thursday.

☆ Yuan falls to lowest since 2008 global crisis, despite state bank support
▼ + stars: | 2022-10-21 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI, Oct 21 (Reuters) - China's yuan fell on Friday to its weakest level against the dollar since the global financial crisis of 2008, despite attempts by major state-owned banks to stabilise the market. Sources told Reuters that state banks sold dollars in the onshore foreign exchange market to prevent the spot price from weakening past the 7.25 per dollar level. State banks usually trade on behalf of the central bank in China's foreign exchange market, but they can also trade for their own purposes or execute orders for corporate clients. Register now for FREE unlimited access to Reuters.com RegisterStill, the onshore yuan finished the domestic trading session down 0.46% on the day at 7.2494 per dollar, the weakest such close since Jan. 14, 2008. The offshore yuan , which trades more freely to reflect market expectations, was trading at 7.2721 per dollar around 0830 GMT.

☆ China c.bank rolls over policy loans for liquidity, keeps rate unchanged
▼ + stars: | 2022-10-17 | by ( ) www.reuters.com time to read: +3 min

SHANGHAI, Oct 17 (Reuters) - China's central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a second month on Monday, largely in line with market expectations. The People's Bank of China (PBOC) said it was keeping the rate on 500 billion yuan ($69.55 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75% from the previous operation. Previously, the PBOC drained a net 200 billion yuan each in August and September. In a poll of 27 market watchers conducted last week, all respondents forecast no change to the MLF rate, with the vast majority of them expecting a partial rollover. The MLF rate serves as a guide to the loan prime rate (LPR), which is scheduled for release on Thursday.

☆ China c.bank rolls over policy loans to maintain liquidity, keeps rate unchanged
▼ + stars: | 2022-10-17 | by ( ) www.reuters.com time to read: +3 min

The People's Bank of China (PBOC) kept the rate on 500 billion yuan ($69.6 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions at 2.75%, unchanged from the previous operation. Monday's liquidity injection was to "keep banking system liquidity reasonably ample" and to "fully meet financial institutional demand," the PBOC said in an online statement. In a poll of 27 market watchers conducted last week, all respondents forecast no change to the MLF rate, with the vast majority of them expecting a partial rollover. Widening policy divergence could risk yuan depreciation and capital outflows, despite inflationary pressure in China remaining largely benign by global standards. The MLF rate serves as a guide to the loan prime rate (LPR), which is scheduled for release on Thursday.

☆ China Q3 growth seen bouncing 3.4%, but 2022 set for worst performance in decades
▼ + stars: | 2022-10-14 | by ( Kevin Yao | ) www.reuters.com time to read: +5 min

Growth is expected to pick up to 3.8% in the fourth quarter, bringing the 2022 pace to 3.2%, far below the official target of around 5.5%. Investors will look for policy signals from a historic congress of the ruling Communist Party due to start on Sunday. The expected 2022 growth would be lower than 4.0% analysts had forecast in a Reuters poll in July and 5.0% in April's forecast. The government is due to release third-quarter GDP data, along with Sept. activity data, on October 18 at 0200 GMT. Economic growth is forecast to quicken to 5.0% in 2023.

☆ China seen partially rolling over policy loans at steady rate - Reuters poll
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +2 min

But some still expect the People's Bank of China (PBOC) to ease banks' reserve requirements next month, to aid an economy hit by the COVID-19 pandemic and property market woes. Most of the 27 participants in the poll conducted this week said they predicted the PBOC will partially renew 50 billion yuan ($6.98 billion) worth of policy loans that mature on Saturday. Traders point out that China's banking system is not short of cash - evidenced by the fact that market rates are lower than policy rates, curbing demand for central bank loans. "We don't expect policy rate cuts until pressure on the currency eases," wrote Zichun Huang, an economist at Capital Economics. Zhou Maohua, analyst at China Everbright Bank, said September's robust credit expansion also made monetary easing less urgent.

☆ China's digital currency passes 100 bln yuan in spending - PBOC
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI, Oct 13 (Reuters) - Transactions using China's digital yuan surpassed 100 billion yuan ($13.9 billion) as of Aug. 31, China's central bank said on Wednesday, as the country continues its roll-out of a central bank digital currency. The spending involved 360 million transactions in pilot areas in 15 provinces and municipalities, the People's Bank of China (PBOC) said, adding that more than 5.6 million merchants could now accept payments with the digital currency. China is at the fore of a global race to develop central bank digital currencies, although adoption is still in the early stages. Transactions using e-CNY rose from 87.6 billion yuan by the end of 2021, the PBOC said. The central bank also took part in the cross-border multiple Central Bank Digital Currency (mCBDC) Bridge trial developed by the Bank of International Settlements and conducted tests to connect with Hong Kong's local digital payment system, it said.

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