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China will lower financing costs for companies, stabilise market expectations and support the property sector in coming months, the People’s Bank of China (PBOC) said at a meeting on Tuesday about the key work for the second half of the year.
China will continue to use multiple monetary policy tools to maintain liquidity reasonably ample, vigorously support technology innovation, green development and the development of small- and micro-sized companies to strengthen economic growth momentum, the central bank said.
The PBOC will continue to deepen the market-oriented interest rate reform, push lower the financing cost for companies and effectively optimize private companies’ financing environment, it said.
The central bank pledged to support a stable and healthy development of the real estate market, including continuing to push lower home mortgage rates and downpayment ratios and guide commercial banks to adjust rates on existing mortgages in a legal and orderly manner, it said.
China will extend the supportive policy for ensuring delivery of sold but unfinished properties, maintain stable real estate financing and step up financial support for rental housing, redevelopment of “city villages” and affordable housing, it said.
Given the sharp weakening of the yuan against the US dollar in the second quarter of the year, the PBOC vowed to strengthen and improve foreign exchange policies and maintain stable operations of the foreign exchange market.
China will closely monitor cross-border capital flows, keep the yuan largely stable and step up support for companies to hedge exchange rate risks, it said.
The PBOC will also coordinate financial support to dissolve local government debt risks and effectively fend off financial risks in key areas, it said.
In addition, the central bank will further facilitate overseas investors’ investment in yuan-denominated assets, simplify the process for their investment in China market, diversify investment products and promote the yuan’s internationalization in an orderly manner, it said.