Daily Macro Economy News on June 12

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International Crude Price Trend and Exchange Rate of RMB to USD Trend

Domestic News

1. Yunze Li pointed out that financial institutions should have firm confidence and increase their support to the real economy with dedication

2. The six state-owned banks have cut deposit rates collectively, and the progress of deposit rate cuts by share banks varies

3. State market regulatory administration and Shandong Provincial Government signed a cooperation agreement around supporting Shandong Province to deepen the transformation of new and old dynamic energy to promote green and low-carbon high-quality development

4. NDRC will accelerate the energy revolution recently and promote the conversion and replacement of old and new energy sources in an orderly manner

International News

1. Moody's expects the ECB to raise interest rates by 25 basis points at its June meeting, which would take its main refinancing rate to 4 percent

2. Russia's domestic demand will gradually replace external demand, and Russia is making a structural shift that requires a special monetary policy

3. There is no need to worry about exchange rate depreciation and excessive net capital outflow triggered by interest rate cut

4. CEO of Russia's second-largest bank: dollar dominance is to end, discussions underway to settle with third countries in yuan

More detials:

Domestic News

1. Yunze Li pointed out that financial institutions should have firm confidence and increase their support to the real economy with dedication

Yunze Li, Secretary of the Party Committee of the China Banking and Insurance Regulatory Commission (CBIRC), went to Shanghai for research for views and suggestions of ideas and policy initiatives around deepening the theme of education, service to the real economy, prevention and resolution of risks, expansion of reform and opening up. Yunze Li pointed out that financial institutions should be firm in their confidence and increase their support to the real economy with dedication. Focus on strengthening and improving the financial supply in areas such as high-level scientific and technological self-sufficiency, manufacturing, rural revitalization, investment and consumption. To adapt to the new situation and new tasks, make a solid practice of internal strength and efforts to costs control, as well as constant improvement on the ability of internal development.

2. The six state-owned banks have cut deposit rates collectively, and the progress of deposit rate cuts by share banks varies

A joint-stock bank in Beijing has cut deposit rates this week, and some of them will act on June 12th. Analysis believes that the current deposit rates are still higher than the 10-year treasury bond yields and still have some appeals, and are not expected to have a significant impact on residents' risk appetite and asset allocation behavior for the time being.

3. State market regulatory administration and Shandong Provincial Government signed a cooperation agreement around supporting Shandong Province to deepen the transformation of new and old dynamic energy to promote green and low-carbon high-quality development

The State Market Regulatory Administration and the Shandong Provincial Government signed a cooperation agreement to support Shandong in deepening the transformation of the old and new dynamics to promote green and low-carbon high-quality development, based on market supervision functions and the actual situation in Shandong Province, in optimizing the business environment, strengthening the high-quality infrastructure construction and other aspects of a series of targeted policy measures.

4. NDRC will accelerate the energy revolution recently and promote the conversion and replacement of old and new energy sources in an orderly manner

The National Development and Reform Commission (NDRC) will accelerate the energy revolution recently and orderly promote the conversion of old and new energy alternatives. They will accelerate low-carbon transformation in key areas, guide the transformation and upgrading of traditional industries, accelerate green and low-carbon science and technology innovation, cultivate new green momentum for economic growth, accelerate the improvement of green and low-carbon policies, provide sound support for green development of fiscal, financial and investment price policies, and promote the dual control of energy consumption gradually shift to carbon emission prevention and control.

International News

1. Moody's expects the ECB to raise interest rates by 25 basis points at its June meeting, which would take its main refinancing rate to 4 percent

Moody's expects the ECB to raise rates by 25 basis points at its June meeting, which would bring its main refinancing rate to 4%. Moody's notes that the ECB will not be prepared to suspend or reverse rate hikes even if inflation is trending lower. There is not yet enough irrefutable evidence that core inflation is steadily moving downward.

2. Russia's domestic demand will gradually replace external demand, and Russia is making a structural shift that requires a special monetary policy

The Russian economy will fully recover to its level before the Ukraine crisis in 2024, said Central Bank Governor Elvira Nabiullina. According to the central bank's forecasts, Russia's domestic demand will gradually replace external demand and the country is undergoing a structural transformation that will require a special monetary policy.

3. There is no need to worry about exchange rate depreciation and excessive net capital outflow triggered by interest rate cut

Bin Zhang, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said there is no need to worry about the exchange rate depreciation and excessive net capital outflow triggered by the interest rate cut. Lowering interest rates can significantly improve the vitality of business operations and economic fundamentals, which will not pose a threat to the RMB exchange rate, and will even support it to a certain extent.

4. CEO of Russia's second-largest bank: dollar dominance is to end, discussions underway to settle with third countries in yuan

The dollar's dominance is coming to an end as the yuan gains ground and the rest of the world sees the danger of Western sanctions against Russia over Russia and Ukraine, Russian  VTB Bank CEO Andrei Kostin said in an interview on Saturday. He noted that the move to freeze hundreds of billions of dollars of Russian sovereign assets will cost the US and the European Union as many countries are turning to currencies other than the dollar and the euro for settlement. Kostin also said that the VTB Bank is discussing the use of the yuan in settlements with third countries.

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