How the Central Bank of China will pump yuan at full throttle
The People's Bank of China injected 700 billion yuan ($ 101 billion) of medium-term loans for one year. All the details with the trend of the Asian stock exchanges and economies
The Central Bank of China has injected liquidity into the banking system via its medium-term loan facility, keeping the interest rate unchanged, a move that could pave the way for lower benchmark lending rates. Here are all the details.
WHAT HAS THE CHINESE CENTRAL BANK DECIDED
The People's Bank of China injected 700 billion yuan ($ 101 billion) of medium-term loans for one year and kept the cost of the loan at 2.95% for the fourth consecutive month, according to a statement posted on the website.
THE COMMUNICATION OF THE CENTRAL INSTITUTE OF CHINA
The central bank last cut the rate in April when it lowered the one-year mid-term lending rate from 3.15% to 95%. "The MLF operation is a one-time continuation of two batches of MLF loans due to expire this month, which fully satisfies market demand," the PBOC said in the statement. The two batches of MLF loans that expire in August are worth a total of 550 billion yuan.
WHAT HAPPENS TO ASIAN BAGS
Asian stock exchanges closed in no particular order, while markets assess the tensions between the US and China. The expected meeting last Saturday between the Washington and Beijing negotiators on the Phase 1 trade agreement signed in January has been postponed ( here the more detailed Start ), without any date being set, while US President Donald Trump warned it could put pressure on other Chinese companies, such as e-commerce giant Alibaba , after ordering the owners of the TikTok app, ByteDance, to sell their US businesses. In Tokyo, the Nikkei index lost 0.83% to 23,096.75 points and the Topix lost 0.84% to 1,609.82 points. In Seoul, the Kospi lost 1.23% to 2,407.49 points. In Hong Kong, the Hang Seng advanced by 0.68% to 25,347.34 points. In mainland China, Shanghai gained 2.34% at 3,438.80 points and Shenzhen gained 1.92% at 2,287.34 points, after the PBOC moves.
HOW JAPAN'S GDP SUFFERS
Weak closing for the Tokyo stock exchange which reacted moderately to the announcement of the historic collapse of GDP in the second quarter, which fell by 7.8% due to the impact of the coronavirus pandemic. However, the published figures were in the market expected range and did not surprise investors, analysts explain. Thus at the end of trading the Nikkei index of leading stocks closed down by 0.83% to 23,096 points and the broader Topix index was down by 0.71% to 1,611.93 points.
ALL THE SUFFERINGS OF THE ASIAN ECONOMIES
Obviously the coronavirus pandemic has not spared the Chinese economy, in the country that has been the de facto 'cradle' of the epidemic that has been shaking the world for months. At the same time, China is the only country that has escaped the recession, underlines the Agi directed by Mario Sechi: GDP rebounded by 11.5% in the second quarter, after falling by 10% in the first . Compared to the previous year, the decline was 6.8% in the first quarter, with a rebound of 3.2% in the second: these are levels of growth much lower than those recorded by Beijing in recent decades. Big drop also for Japan: the Tokyo government announced this morning that GDP fell by 7.8%, the third quarter in a row of contraction.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/come-la-banca-centrale-della-cina-pompera-yuan-a-manetta/ on Mon, 17 Aug 2020 14:20:40 +0000.