China will ensure that measures taken are well-focused and effective, and the prescription is precise, said Li.
The central bank's innovative monetary tools are an example of how China is striving to make small and micro businesses -- an important part of the real economy -- truly benefit from government policies, according to market analysis.
Direct purchase of inclusive loans will lower the debt costs of banks and help with replenishing liquidity, said Li Qilin, chief economist of Yuekai Securities, adding that small firms can then get more credit support.
According to the PBOC, the 400-billion-yuan funds will be offered to local banks via an intermediary special-purpose vehicle, which won't charge interest for banks, making it effectively interest-free.
Local banks will be encouraged to issue new inclusive small and micro credit loans of nearly 1 trillion yuan, compared to over 300 billion yuan issued last year, the central bank estimated.
By offering local banks incentives equal to 1 percent of the principal to be extended, the central bank said it expected to provide a total of 40 billion yuan, at most, to support about 3.7 trillion yuan in extended loans.
Other enterprises with special difficulties, such as foreign trade companies, could discuss possible loan extension timelines with their banks, the PBOC has said.
Pan Gongsheng, vice governor of the PBOC, said the two new instruments are short-term policies created at a special time, and are different from quantitative easing in nature and scale.
【国内英语资讯:Economic Watch: China leverages monetary tools to channel funds into real economy】相关文章:
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