Economy Apr 17

PBoC to bolster real economy via targeted RRR cuts, refinancing

Central bank says loans programmes will continue as nation rebuilds after epidemic

by Nadeem Xu
PBoC to bolster real economy via targeted RRR cuts, refinancing
Small businesses are being targeted for support. Photo: AFP

(ATF) China's central bank will continue to channel credit funds into the real economy, especially small businesses, through measures such as targeted reserve requirement ratio (RRR) cuts and refinancing.

With a variety of policy tools, the central bank has sought to enhance financial countercyclical regulation and control to provide more credit support for the real economy, the People's Bank of China (PBoC) said in a statement on Thursday.

In the first quarter, the new yuan-denominated loans hit 7.1 trillion yuan ($1trn), the highest quarterly level in history, the central bank said.

Along with the growing credit supply, the credit structure has been optimized and the credit support is becoming more targeted and effective, the central bank said.

Anti-epidemic measures and epidemic-affected sectors have received strong loan support, and the manufacturing, infrastructure and service industries have received more medium- and long-term loans.

The scale and coverage of small and micro loans has rapidly resumed their upward growth trend, which will benefit small businesses.

The balance of loans for small and micro firms stood at 12.4trn yuan at the end of March, up 23.6%, year-on-year. The growth rate not only reversed the decline in January and February, but also rose 4.5 percentage points over the same period last year.

The balance of loans for small and micro firms accounted for 7.7% of the total balance of loans at the end of March, 0.6 percentage points higher than the same period last year.

The scale and coverage of small and micro loans will continue to grow rapidly, the central bank said.