Central Bank Governor Convenes Meeting on Dealing with Economic Impacts of Coronavirus

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The governor of the People’s Bank of China (PBOC) has convened a special meeting on measures to deal with the economic fallout from the spread of the novel coronavirus.

On 24 February PBOC governor Yi Gang (易纲) convened a meeting on efforts by the central banking system to contain the impacts of the novel coronavirus, according to information from PBOC’s official website.

The meeting highlighted key measures across three areas:

First area

PBOC will focus more on flexible and appropriate monetary policy, and place greater emphasis on supporting the recovery and growth of the real economy.

The central bank said it will make effective use of financial support policies, and when appropriate unveil new policy support measures to effectively offset the impacts brought by the spread of the coronavirus.

PBOC will follow up on the 300 financial support measures for combating the coronavirus released on 1 February, which include the deployment of 300 billion in specialist re-loans.

Data recently released by the Chinese central bank indicates that as of 20 February the Chinese government has compiled a list of 876 key national enterprises and 1082 key local enterprises that are designated as specialist recipients of re-lending.

727 of these key enterprises have already received loans at a real financing rate of 1.30%, as compared to the maximum threshold of 1.60% stipulated by the State Council.

Second area

PBOC said the it will engage in innovation and improvement of financial support methods with regard to urgent problems faced by enterprises resuming work and production, in areas including debt repayments, cash flow and expansion of financing.

The central bank will push for financial institutions to provide specialist loan quotas to sectors, private enterprises and micro-and-small enterprises (MSE) that are heavily impacted by the coronavirus.

It will also encourage financial institutions to adjust and improve repayment arrangements for enterprises, expand loan rollovers and loan extensions, appropriately reduce or make exemptions for MSE loan rates, and prevent the severing of enterprise financing chains.

Third area

PBOC will continue to implement strict arrangements to ensure the safety of personnel, and drive the orderly resumption of work throughout the entire central bank system.

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