China may step up fiscal policies and marginally loosen – Yicai

China may implement policies to supporting the economy, “including faster issuances of local government bonds and marginally boost liquidity, as the economy faces more headwinds in the second half including slowing exports,” Yicai.com reported, citing economists.

Key quotes

“While July's loan data showed less than expected credit growth, it was likely due to seasonal patterns, as historically the first month of a quarter tends to be weak.”

“Monetary policy boost, including a RRR cut or more MLF and OMO operations, may be timed to help the sales of local government special bonds.”

Read: China: Three factors to watch for the Delta variant – ANZ

USD/CNY reaction

USD/CNY was last seen trading at 6.4764, modestly flat on the day.