(Yicai Global) March 4 -- Financial policies governing the property market will remain consistent and stable and will not be relaxed to give a short-term stimulus to China's economy, the central bank said today.
To help businesses pull through the coronavirus epidemic, financial institutions should give greater priority to support the recovery and development of the real economy, step up credit supply and reduce lending costs, the People's Bank of China said in a statement.
Prudent monetary policy should remain flexible and moderate to maintain a reasonably ample level of liquidity, it added. The macro prudential assessment framework can be further improved.
The potential of the loan prime rate, which was reformed last year to increase the role of market forces in helping lenders set interest rates, should be capitalized on. On Feb. 20, the PBOC lowered the one-year LPR to 4.05 percent from 4.15 percent and the five-year LPR to 4.75 percent from 4.8 percent.
The bank recently made available CNY300 billion (USD43 billion) in low interest loans to help those fighting the virus. Lenders should make good use of these funds to provide fast and targeted support to firms that are participating in epidemic prevention and control and are responsible for ensuring the supply of materials.
Financial support to areas, sectors and businesses severely hit by the epidemic should be stepped up, the PBOC said. Financial services for key vulnerable areas such as advanced manufacturing, poverty alleviation as well as people's wellbeing and employment need to be enhanced to help businesses resume normal operations.
Editor: Kim Taylor