Chinese Banks Providing 10 Billion Yuan in Discount Loans on Average Each Day to Help Combat Coronavirus

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The People’s Bank of China (PBOC) says it has provided 184 billion yuan in special re-loans as of 13 March, as part of efforts to help mitigate the economic impacts of the novel coronavirus.

At a State Council press conference held on 15 March Sun Guofeng (孙国峰), head of PBOC’s monetary policy department, said that the loans had enabled nine national banks and 10 provincial and municipal legal person banks to also issue 182.1 billion yuan in discount loans to 4708 key national and local enterprises.

On average these enterprises obtained 40 million yuan in preferential loan funds, with a weighted average interest rate of 2.56%.

Following a discount of 50% the actual financing cost for these enterprises has been around 1.28%, which is lower than the rate of no more than 1.60% mandated by the State Council for key enterprises and those contributing to coronavirus containment efforts.

According to Sun at present Chinese banks are now providing at least 10 billion yuan in discount loans each day on average for a marked acceleration.

PBOC’s official news outlet said that during the period from 25 January to 10 March these discounted loans had helped key Chinese enterprises to produce:

  • 1.6 billion face masks,
  • 87.79 million protective garments,
  • 4.31 million protective goggles,
  • 10.29 million virus tests,
  • 4,143 ambulances,
  • 2.49 million tonnes of vegetables, and
  • 3.74 million tonnes of grain.

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