China to step up credit support to real economy, to keep yuan largely stable – PBOC governor Yi Gang

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The PBOC will keep liquidity reasonably ample and increase credit support to the real economy, the central bank governor Yi Gang said in a statement published on Sunday.

“China has the conditions to maintain a normal monetary policy as long as possible and maintain the stability of the currency’s value.”

The PBOC will keep the yuan’s exchange rate largely stable while enhancing its flexibility, he said.

China will continue to push financial institutions to lower real interest rates on bank loans and reduce overall corporate financing cost and individual credit cost, he said.

As of the end of September, the PBOC’s outstanding structural monetary tools stood at 5.55 trillion yuan, and in the in the first nine months of the year, the weighted average rate on corporate loans stood at 4.24%, a historical low level and down 0.29 percentage points from a year earlier, according to Yi.

China will “meet rigid housing demand and and the demand for improving housing condition, support property deliveries and promote forming a new development model for the real estate sector.”

The central will make 200 billion yuan in special loans to ensure the delivery of stalled housing projects, Yi noted, referring to a scheme announced by authorities in August. “China will properly resolve financial risks in the real estate sector and guide financial institutions to meet property developers’ demand for financing, within reason.”

China will further enhance financial supervision and prudently curb financial risks, he said, adding that the country disposed of over 12 trillion yuan of non-performing assets in the banking sector between 2017 and 2021.

In the period of January – September, the PBOC submitted a total of 1.13 trillion yuan of profit to the central government, which “directly increased fiscal funding for the policy of value-added policy returns and fiscal transfer to local governments,” he said.

In addition, China will adopt full registration-based IPO system at an appropriate time, actively develop futures markets, support qualified Chinese companies to list overseas, he said.