China orders more lending to entrepreneurs amid trade spat Asia News

The Shanghai Composite Index falls some 2.5 per cent this morning. — Reuters pic

China aims to expand its economy by around 6.5 percent in 2018.

The yuan has been on a downward trend for months, weakening around 9% since the start of April, according to data from the central bank.

The People's Bank of China's turn will discharge 1.2 trillion yuan in liquidity, with 450bn yuan of that because of counterbalance developing credits - meaning 750bn yuan will be infused into the money related framework.

Beijing has increasingly geared its policies toward supporting exporters and persuading banks to offer more loans to small and medium-sized firms, which account for the bulk of the country's jobs, by lowering banks' RRRs.

Beijing imposed similar controls in October 2015 after a change in the exchange rate mechanism prompted markets to bet the yuan would fall.

Chinese market weakness comes despite authorities taking steps to support the economy amid concerns over growth and the impact of the trade war.

Coming on the final day of the National Day holiday, the South China Morning Post says "the central bank's announcement may also serve as a shot in the arm for the China's stock market when trading resumes on Monday morning".

Khashoggi 'hit squad' included a forensics expert and a former diplomat
Khashoggi is a Washington Post columnist and former general manager and editor-in-chief of Al Arab News Channel. Saudi Arabia is also unhappy about Ankara's growing proximity to the kingdom's Shiite rival, Iran.

The "very timely" RRR cut is big enough to help boost confidence in the economy, said Xu Hongcai, deputy chief economist at the China Centre for International Economic Exchanges, a Beijing think tank.

"We've been expecting for some time now the USA market to start delivering volatility".

The announcement of the relaxing the RRR requirement for the banks, which are also saddled with the huge local government debt of United States dollars 2.58 trillion comes amid deepening trade war with US and raising of the interest rates by US Federal Reserve, intensifying the pressure on capital outflows.

Analysts had attributed Monday's losses to Chinese investors playing catch-up after a week-long holiday, during which a sharp sell off in global bond markets had dragged down equity markets. The global dollar index rose to 94.143 from the previous close of 94.133.

Following the PBOC's move, the offshore yuan was 0.2 percent weaker against the dollar in early trade on Monday. One-year NDFs are settled against the midpoint, not the spot rate.

The central bank claimed the move would have little impact on the yuan, saying it had solid fundamentals and would remain stable, but reduced the central parity rate against the dollar by 165 basis points yesterday, to 6.8957. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.9523, 1.37 percent weaker than the midpoint. The report, which followed a slew of strong indicators on the world's top economy, saw yields on benchmark 10-year Treasuries rise for the third straight day, hitting a fresh seven-year high with the Fed expected to stick to its rate hike drive.

European markets were also set to weaken, with financial spreadbetters expecting the FTSE to open 0.07 percent lower, Frankfurt's DAX down 0.03 percent, and Paris' CAC down 0.1 percent.

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