China’s central bank urged the country’s lenders to step up support for the real economy and meet credit demand as the world’s second-largest economy faces mounting downward pressure.
At a meeting with 24 financial institutions, the People’s Bank of China and China’s banking regulator urged lenders “to do whatever it takes to stabilize the fundamentals of the economy,” the PBOC said in a statement Tuesday.
The PBOC urged banks to make full use of various policy tools and support “quality” economic growth by increasing lending “appropriately”. It also urged banks to steadily increase home lending after a recent spate of policy easing to shore up the economy from a prolonged housing slump.
The central bank listed sectors – including small businesses, green development, technological innovation and energy supplies – as key sectors that should receive financial support from banks. It also called on banks to extend and defer loan repayments to small businesses, truck drivers and individuals hard hit by the pandemic, while accelerating lending to businesses and individuals.
China’s new lending growth collapsed in April as home mortgage lending shrank amid massive city lockdowns and tight Covid-19 control measures that hampered lending and dampened loan demand. Several key economic indicators, including consumer spending and industrial production, fell sharply in April from a year earlier, prompting investment banks to lower their forecasts.
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