China’s central bank and other regulators announced a slew of targeted measures aimed at helping companies, banks and individuals hurt by the viral pneumonia outbreak.
The central bank will supply 1.2 trillion yuan ($174 billion) to money markets on Monday, according to a statement on Sunday. The money will be supplied using reverse repurchase agreements to ensure liquidity is “reasonably ample” during the outbreak, according to the People’s Bank of China announcement, which did not say the tenor of the agreements.
That announcement follows a a joint statement with other ministries and financial regulators on Saturday, which promised to use open market operations, the standing lending facility and other tools to ensure interbank liquidity is sufficient to keep money market rates stable
The PBOC urged banks to increase lending to the whole economy, and said it will give banks 300 billion yuan in relending to help them provide more money to a list of affected companies. Banks were told they shouldn’t withdraw loans from firms affected by the virus, especially from smaller ones.
Banks should also consider rolling over loans or cutting interest rates to help affected companies, and regulators will allow those firms to delay reporting their results for 2019 and the first quarter of 2020.
Lending Boost
The new measures follow the announcement last week that China’s biggest banks will lower interest rates for firms in Hubei, the center of the outbreak. In the Saturday statement, financial institutions were told to maintain the pace of overall credit expansion and continue to lower borrowing costs across China, especially to manufacturers, and to small and private firms.
The PBOC will “keep close contact with financial institutions and financial markets to stay fully on top of the liquidity situation and demand,” PBOC Deputy Governor Pan Gongsheng said in an Q&A with the bank’s newspaper, Financial News, which was released at the same time as the announcement. The PBOC will “release policy information in a timely manner and guide market expectations,” he said.
Pan also said the central bank will temporarily waive the cap for foreign exchange settlement for companies in need, as long as it’s for reasons related to the virus.
The central bank will be less strict in its checks on banks’ required reserves at the end of January, and will facilitate companies’ use of foreign exchange to ensure that offshore borrowing isn’t impacted and goods needed to battle the virus can be imported without problems.
https://www.bloomberg.com/news/arti...idity-amid-coronavirus-outbreak?sref=61mHmpU4
They are copying the FED - just do it more boldly than the rookies at the NY FED....!
The central bank will supply 1.2 trillion yuan ($174 billion) to money markets on Monday, according to a statement on Sunday. The money will be supplied using reverse repurchase agreements to ensure liquidity is “reasonably ample” during the outbreak, according to the People’s Bank of China announcement, which did not say the tenor of the agreements.
That announcement follows a a joint statement with other ministries and financial regulators on Saturday, which promised to use open market operations, the standing lending facility and other tools to ensure interbank liquidity is sufficient to keep money market rates stable
The PBOC urged banks to increase lending to the whole economy, and said it will give banks 300 billion yuan in relending to help them provide more money to a list of affected companies. Banks were told they shouldn’t withdraw loans from firms affected by the virus, especially from smaller ones.
Banks should also consider rolling over loans or cutting interest rates to help affected companies, and regulators will allow those firms to delay reporting their results for 2019 and the first quarter of 2020.
Lending Boost
The new measures follow the announcement last week that China’s biggest banks will lower interest rates for firms in Hubei, the center of the outbreak. In the Saturday statement, financial institutions were told to maintain the pace of overall credit expansion and continue to lower borrowing costs across China, especially to manufacturers, and to small and private firms.
The PBOC will “keep close contact with financial institutions and financial markets to stay fully on top of the liquidity situation and demand,” PBOC Deputy Governor Pan Gongsheng said in an Q&A with the bank’s newspaper, Financial News, which was released at the same time as the announcement. The PBOC will “release policy information in a timely manner and guide market expectations,” he said.
Pan also said the central bank will temporarily waive the cap for foreign exchange settlement for companies in need, as long as it’s for reasons related to the virus.
The central bank will be less strict in its checks on banks’ required reserves at the end of January, and will facilitate companies’ use of foreign exchange to ensure that offshore borrowing isn’t impacted and goods needed to battle the virus can be imported without problems.
https://www.bloomberg.com/news/arti...idity-amid-coronavirus-outbreak?sref=61mHmpU4
They are copying the FED - just do it more boldly than the rookies at the NY FED....!
