The People’s Bank of China, China’s central bank, has announced that it will increase the special quota for refinancing and rediscounting of financial institutions by RMB 500 billion ($71.2 billion), following the RMB 300 billion re-loan fund for epidemic prevention and control announced by the PBOC previously. Financial institutions will be able to apply for refinancing and rediscounting at local branches of the PBOC if their small and micro-enterprise and private enterprise lending ratios are high enough.
Meanwhile, the PBOC has decided to lower the interest rate for re-lending by 0.25 percentage points to 2.5 percent to support agriculture and rural areas and small and medium-sized enterprises. This decision aims to support resumption of production and reduce financial difficulties for smaller companies. The additional amount of money for re-lending will be aimed at supporting agriculture, foreign trade and the service industries, including transportation.