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The People's Bank of China (PBOC) lowered its 14-day reverse repo rate to 1.85% from 1.95%, further easing local monetary conditions to support economic growth.

Additionally, the PBOC injected 234.6 billion yuan ($33.29 billion) into the banking system through open market operations, stating it aimed to "maintain adequate quarter-end liquidity at a reasonable level within the banking system."

The People’s Bank of China (PBOC) left its Loan Prime Rates (LPRs) unchanged during its September meeting, held on Friday, September 20. The one-year and five-year LPRs remained steady at 3.35% and 3.85%, respectively.

China's trade balance for August was CNY 649.34 billion, up from the previous figure of CNY 601.98 billion, primarily due to a significant rise in exports.

Exports rose by 8.4% year-over-year (YoY) in August, up from 7.0% in July and exceeding the 6.5% estimates. On the other hand, imports grew by only 0.5% YoY during the same period, falling short of the 2.0% estimate and down from the 7.2% registered previously.

In US dollar terms, China’s trade balance came in at +$91.02 billion, surpassing the expected +$83.9 billion and the previous +$84.65 billion.

For the period from January to August:

• USD-denominated exports increased by 4.6% YoY.
• USD-denominated imports grew by 2.5% YoY.
• The USD-denominated trade surplus was +$608.9 billion.

China's Consumer Price Index (CPI) rose by 0.6% annually in August, with nearly all of the increase driven by changes in food prices, while prices for other goods rose by only 0.2%. On a monthly basis, China's CPI rose by just 0.4%. Both the annual and monthly inflation rates fell short of market estimates of 0.7% and 0.5%, respectively.

Additionally, producer prices dropped by 1.8%, exceeding the forecasted decline of 1.4%.

China's Services Purchasing Managers' Index (PMI) fell to 51.6 in August, down from 52.1 in July, and missing the 51.9 consensus estimates.

As expected, the PBOC kept its one-year loan prime rate at 3.35%, while the five-year LPR, which is used to determine mortgage prices, was maintained at 3.85%.

The central bank had unexpectedly trimmed both rates by about 10 basis points in July, a move that came amid a slew of measures aimed at shoring up local economic growth.

The LPR is determined by the PBOC based on input from 18 designated commercial banks and serves as a benchmark for lending rates in the country. The five-year rate is closely tied to China’s property market, which has been struggling with nearly four years of slowing sales and an extended cash crunch.

Potential weakness in the economy could prompt the PBOC to cut rates further in the coming months.

China's New home price dropped by 8.2% year-over-year, deepening to a new 9-year low. Despite stimulus, this fall in prices indicates an acceleration in the downward trend in the country's housing market.

Fixed Asset Investment grew by only 3.6% in July, falling short of the 3.9% growth forecast.

Industrial production slowed to a growth rate of 5.1% in July, down from 5.3% in the previous month and below the 5.2% expected.

Unemployment rose to 5.2% in July, up from 5.0% in June and higher than the 5.1% forecast.

After a series of unexpected rate cuts by the PBoC, Chinese consumer inflation grew more than expected in July. The Consumer Price Index (CPI) increased by 0.5% on both a monthly and annual basis.

In addition, the Producer Price Index (PPI), which was expected to fall by 0.9%, matched the June figure and decreased by 0.8%.

The Caixin China General Manufacturing PMI dropped to 49.8 in July 2024 from 51.8 in June, missing the 51.5 forecast.

China's NBS Manufacturing PMI fell to 49.4 in July 2024 from 49.5 in June, slightly above market expectations.  

The People’s Bank of China surprised the market by cutting its benchmark loan prime rates further into record-low territory earlier today to boost the slowing economy, while estimates were about holding the rates and policies. 

The PBOC cut its one-year loan prime rate to 3.35% from 3.45%.
The five-year LPR, which is used to determine mortgage prices, was cut to 3.85% from 3.95%. 
The PBOC cut its seven-day reverse repo rate to 1.7% from 1.8%.

The LPR is determined by the PBOC based on considerations from 18 designated commercial banks and is used as a benchmark for lending rates in the country.