BEIJING – China’s central bank said on Friday it launch a 100 billion yuan ($15 billion) relending facility to support the transport, logistics and storage sectors which have been hit hard by COVID-19.
The People’s Bank of China (PBOC) will better combine its broad-based and structural policy instruments, and constantly optimise its structural policy system, it said in a statement posted on its Wechat account.
“Monetary policy should coordinate with fiscal and industrial policies to jointly boost the confidence of market players, stimulate market drivers, support the real economy and achieve the goal of stable growth,” the central bank said.
The PBOC has increasingly relied on targeted policy tools, including low-cost loans, to support the slowing economy, as it faces limited room to cut interest rates for fear of fuelling capital flight and inflation.
Such structural policy instruments will give financial institutions more incentives to boost lending at lower funding costs to small firms and weak links of the economy, the central bank said.
On Wednesday, the PBOC said it had allocated an additional 100 billion yuan worth of loans dedicated to coal production and storage.
The PBOC has rolled out relending facilities to support carbon emission reduction, tech innovation and elderly care.
China’s outstanding relending and rediscount loans totalled 2.47 trillion yuan at the end of March, a rise of 526.3 billion yuan year-on-year, the central bank said.
($1 = 6.6623 Chinese yuan renminbi)
(thsi story refiles to fix typo in paragraph 8)
(Reporting by Kevin Yao and Ella Cao in Beijing; writing by Meg Shen; Editing by Jason Neely and Edmund Blair)