Developing | China to cut key policy relending rates, expand credit support for private and tech firms

China’s central bank will slash key policy relending rates by a quarter of a percentage point, its deputy governor announced at Thursday’s press conference in Beijing.

The one-year rate of the People’s Bank of China’s structural relending tools will be lowered to 1.25 per cent from the current 1.5 per cent, said Zou Lan, the deputy governor.

“We still have certain room for a cut of the reserve requirement ratio and interest rate for this year,” Zou said, adding that the cut of relending rates would take effect on Monday.

According to Zou, the central bank will link the relending programme for agricultural and small businesses with the rediscount facility, increase the quota, and separately establish a relending facility for private enterprises.

The new plan includes an extra 500 billion yuan (US$71.7 billion) for agriculture and small businesses, and a dedicated 1 trillion yuan facility for small and medium-sized private firms, which will be the primary focus of support.

The bank will also expand its relending programme for technological innovation and industrial upgrading, increasing the quota from 800 billion yuan to 1.2 trillion yuan, Zou said.