China’s central bank said on Monday it would provide financial assistance to industries, businesses and individuals affected by the COVID-19 outbreaks as part of efforts to ease the country’s economic decline. The People’s Bank of China (PBOC) said in a statement posted on its website that authorities will guide financial institutions to increase lending and return profits to the real economy. According to the central bank, financial institutions should provide flexible aid to people affected by COVID by postponing loan repayments and not recording unpaid debts.
China will set reasonable down payments and minimum interest rates on commercial housing loans, and meet the reasonable financing needs of property developers and construction companies, to help stabilize the property market, the PBOC said. Financial institutions should actively respond to the financing needs of transport and logistics companies and truckers, as part of measures to support logistics and supply chains, he added.
Financial institutions should appropriately purchase local government bonds to support infrastructure investment, the central bank said. China’s economy slowed in March as consumption, real estate and exports were hit hard, tarnishing faster-than-expected first-quarter growth figures and worsening an outlook already weakened by COVID-related restrictions -19 and the war in Ukraine.
By mid-April, the PBOC had paid out 600 billion yuan ($94.31 billion) in profits to the central government, equivalent to a 25 basis point cut in banks’ required reserve ratios (RRRs), the central bank said, adding it is on track to pay out more than 1.1 trillion yuan in profits this year. China’s central bank said in March it would pay more than 1 trillion yuan in profits to the central government this year.
On Friday, the PBOC announced it would reduce the RRR — the amount of cash banks must hold as reserves — for the first time this year to support a slowing economy. China will also make it easier for businesses to incur external debt, help businesses improve the use of cross-border yuan settlements and currency hedging, the central bank added.
Summary of news:
- China to provide financial aid to sectors affected by COVID outbreaks
- Check out all the news and articles from the latest business news updates.