Loans

C. Bank governor says China about to issue low-cost loans for emissions cuts

C. Bank governor says China about to issue low-cost loans for emissions cuts
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China’s new central bank governor Yi Gang (center) leaves after a speech at the annual session of the China Development Forum (CDF) 2018 at the Diaoyutai State Guesthouse in Beijing, China, March 25, 2018. REUTERS/Jason Lee

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BEIJING (Reuters) – China’s central bank will issue by the end of the month the first batch of low-cost loans to financial institutions to enable them to reduce carbon emissions, Xinhua news agency reported on Tuesday, citing an interview with the central bank. Governor Yi Gang.

The People’s Bank of China (PBOC) said in November it would provide 60% of the principal of the loan taken out by financial institutions to cut carbon emissions, with a one-year lending rate of 1.75%, without specifying when the lending would be issued. Read more

The measure is in line with China’s broader goal of peaking emissions before 2030 and achieving carbon neutrality by 2060, as well as protecting the economy from the fallout from the COVID-19 pandemic.

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The Chinese economy, which is the largest in the world after the United States, is facing triple pressures of declining demand, supply problems and declining expectations, Yi said, emphasizing an earlier official comment.

“The macroeconomic market must be stable,” he told Xinhua. “In addition, it is necessary to allow corporate shareholders and local authorities to take responsibility for the risky events that occur in the market.”

Yi said the People’s Bank of China will keep its monetary policy flexible, appropriate and sufficient liquidity.

To further relieve pressure on businesses, which can generally obtain corporate loans at an average interest rate of 5%, a record low, the People’s Bank of China (PBOC) will increase the quota for small business refinancing as necessary, Yi said.

He also said that financial risks are under control and that the outlook for the real estate market has improved.

“The structural adjustment of the real estate market is conducive to the formation of a new real estate development model in the country, and the healthy development of the whole industry,” Yi said.

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Additional reporting by Cheng Ling, Ryan Wu, and Beijing Newsroom; Editing by Himani Sarkar and Barbara Lewis

Our Standards: Thomson Reuters Trust Principles.

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