China to cut relending rates, widen credit support for private sector and tech
Beyond the central bank’s rate cuts that take effect Monday, authorities will work to lower the minimum down payment for commercial property purchase loans to 30 per cent
China’s central bank is looking to pump 900 billion yuan (US$129.2 billion) worth of additional funds into private and technology firms, alongside slashing key policy relending rates by a quarter of a percentage point, in a fresh round of monetary easing designed to shore up the economy.
The new plan includes an extra 500 billion yuan for agriculture and small businesses, said Zou Lan, a deputy governor of the bank, at a press conference in Beijing on Thursday.
The bank will also expand its relending programme for technological innovation and industrial upgrading, increasing the quota by 400 billion yuan to 1.2 trillion yuan, Zou said.
Relending, where a central bank provides loans to financial institutions, is typically employed to guide private capital towards certain sectors or behaviours.
The one-year rate of the People’s Bank of China’s structural relending tools will be lowered to 1.25 per cent from the current 1.5 per cent, Zou said. The PBOC said the cut of relending rates would take effect on Monday.