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China to strengthen policy, lower lending rates

May 26, 2020 | 🚀 Fathership
BEIJING: China will strengthen its economic policy and continue efforts to lower interest rates on loans, central bank Governor Yi Gang said, reinforcing expectations of further support measures to revive an economy ravaged by the coronavirus pandemic.

The People's Bank of China will use various monetary policy tools to maintain sufficient liquidity, and keep the annual growth rate of M2 money supply and social financing significantly higher than last year, Yi said.

Since the virus outbreak, the central bank's policy measures, including bank reserve requirement cuts, relending, rediscount facilities, have amounted to 5.9 trillion yuan, Yi said.

China will help banks, especially small and medium-sized banks, to replenish capital through multiple channels, and improve their ability to handle bad loans, he added.

The central bank will deepen reform of the loan prime rate, the benchmark lending rate, to help lower real lending rates, and will steadily unify benchmark deposit, lending rates and market interest rates, Yi said.