The Chinese central bank will provide more than 200 billion yuan ($28.7 billion) in special relending funds to commercial banks to boost loans to companies, the latest effort by authorities to support the economy.
(Bloomberg) — The Chinese central bank will provide more than 200 billion yuan ($28.7 billion) in special relending funds to commercial banks to boost loans to companies, the latest effort by authorities to support the economy.
The funds will be used to support banks to make loans to firms who upgrade equipment in the fourth quarter, the State Council announced after a meeting Tuesday, according to a report in the official Xinhua News Agency. Banks were encouraged to lend to companies in manufacturing and services sector as well as small firms at an interest rate not higher than 3.2%, the report said.
The central bank will provide banks funds equivalent to these loans for a year via the relending program, which can be extended twice. The central government will subsidize the companies’ interest payments on the bank loans to ensure the actual interest rate is no higher than 0.7%.
In addition to the relending, smaller companies will also be able to defer tax payment for another four months from this month, providing 440 billion yuan worth of tax breaks, the statement said. The meeting was chaired by Premier Li Keqiang.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
