MNI China Press Digest May 14: PBOC, Yuan, U.S. LNG

Highlights from Chinese press reports on Wednesday:

• The People’s Bank of China has signed a currency swap agreement with the Central Bank of Brazil, allowing for a maximum of CNY190 billion (BRL157 billion) over a five-year period, according to a PBOC statement. The agreement will facilitate using local currencies in bilateral trade and investment, while supporting financial market stability, the statement said. Additionally, the PBOC signed a Memorandum of Understanding with Brazil’s Finance Ministry to enhance coordination on financial markets and monetary policy.
• The recent easing in trade tensions has strengthened yuan momentum against the U.S. dollar in the near term, buoyed by improved market sentiment, Securities Daily reported, citing Wang Qing, an analyst at Golden Credit Rating. Both the onshore and offshore yuan climbed to intraday highs not seen since November, the daily noted. Authorities' measures to stabilise economic growth and the central bank’s frequent signals to stabilise the currency will lend further support to the yuan, the newspaper said citing analysts.
• Chinese buyers will remain cautious about buying U.S. LNG despite a climb down in trade tensions between the two countries, given Beijing’s 15% additional tariff on American LNG imports, imposed in February, remains in place, according to Xu Fei, senior natural gas analyst at ICIS. Buyers typically need to order LNG one to two months ahead of delivery, Xu noted, adding that buyers were concerned by the risk of policy shifts during this window. China is expected to add about 7 billion cubic meters of Russian pipeline gas to imports this year, effectively replacing previous U.S. sources, said Feng Haicheng, a natural gas analyst at Zhuochuang Information. At the same time, strong domestic natural gas production has suppressed the demand for LNG imports, Feng added.