RT-Banner-2020C.gif

China Daily

News> Business> Content
Sunday, March 15, 2020, 20:38
PBOC plans to further lower lending rates for enterprises
By Chen Jia
Sunday, March 15, 2020, 20:38 By Chen Jia

This undated photo shows the headquarters of the People's Bank of China in Beijing. (SHI YAN / CHINA DAILY)

The Chinese monetary authorities will take various measures to further lower lending rates for companies, even if it means sacrificing part of commercial banks profits, to reduce impact of the novel coronavirus and accelerate production resumption, a central bank official said on Sunday.

The central bank will keep liquidity at a reasonably ample level, which can help to reduce financing costs, and further promote the reform of the loan prime rate (LPR), a new benchmark of lending rate, said Sun Guofeng, head of the monetary policy department of the People's Bank of China, the central bank.

Since the COVID-19 outbreak, the PBOC has provided 300 billion yuan special re-lending fund, and 500 billion yuan fund through its re-lending and re-discounting mechanisms

The PBOC will lead the banking sector to sacrifice part of their profits to support the real economy, or the non-financial sector, Sun added.

READ MORE: PBOC adopts measures to ensure stability amid virus outbreak

The PBOC official stressed that the benchmark deposit rate will play a key role in the whole interest rates system as heated discussions arose recently on whether the monetary authorities should decrease the one-year deposit rate to ease banks' burden and further boost cheaper loans.

Sun said the central bank will include structural deposit products into the macro-prudential assessment system, to prevent banks lifting up interest rates for attracting deposits. This measure can help to stabilize commercial banks' costs on the liability side.

In February, the general level of lending rates, excluding personal mortgage loans, was at 5.49 percent, 0.61 percentage points lower than that in July 2019, showed the PBOC data.

ALSO READ: China boosts fiscal support for epidemic-hit poor people

Since the COVID-19 outbreak, the PBOC has provided 300 billion yuan special re-lending fund, and 500 billion yuan fund through its re-lending and re-discounting mechanisms.

As of Friday, the central bank has delivered 184 billion yuan of special re-lending fund to commercial banks. Companies enjoyed the real financing cost at about 1.28 percent. And 107.5 billion yuan of the 500 billion yuan fund has been used to support commercial banks, the PBOC said.



Share this story

Q&A time with female footballer Wang Shuang from China

CHINA DAILY
HONG KONG NEWS
OPEN
Please click in the upper right corner to open it in your browser !