MNI China Daily Summary: Tuesday, Aug 12

POLICY: Chinese authorities will offer an annual interest subsidy of 1% for personal consumption loans taken out between Sept 1, 2025 and Aug 31, 2026, the country's Finance Ministry announced.

LIQUIDITY: The PBOC conducted CNY114.6 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net drain of CNY46.1 billion after offsetting maturities of CNY160.7 billion, according to Wind Information

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.4444% from1.4404%, Wind Information showed. The overnight repo average increased to 1.3162% from 1.3144%.

YUAN: The currency weakened to 7.1911 against the dollar from 7.1818. The PBOC set the dollar-yuan central parity rate higher at 7.1418, compared with 7.1405 on Monday. The fixing was estimated at 7.1905 by Bloomberg survey.

BONDS: The yield on 10-year China Government Bonds was last at 1.6800%, up from the close of 1.6425%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index was up 0.50% to 3,665.92, while the CSI300 index rallied 0.52% to 4,143.83. The Hang Seng Index rose 0.25% to 24,969.68.

FROM THE PRESS: China and the U.S. will extend by 90 days the pause on 24% reciprocal tariffs, along with China’s non-tariff countermeasures, according to a joint statement following their meeting in Stockholm. China’s Ministry of Commerce said the suspension of the unreliable entity list and export controls on dual-use items against U.S. companies will be extended.

Overseas central bank–type institutions will no longer need to provide a compliance commitment letter when opening accounts to invest in China’s interbank bond market starting Monday, Securities Times reported. The move will further improve efficiency and convenience for overseas central banks or monetary authorities, international financial organisations, and sovereign wealth funds investing in China’s bond market, the newspaper said.

The benchmark Shanghai Composite Index hit a new high this year, reaching an intra-day peak of 3,650 on Monday, China Securities Journal reported. The turnover in the A-share market exceeded CNY1.8 trillion, with over 4,100 stocks rising and over 80 hitting the day limit, the newspaper said.