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MNI: PBOC Seen Cutting Deposit Cost As It Pushes Banks To Lend

MNI (Singapore)

Increased borrowing is an important policy plank for China's growth target.

True

The People’s Bank of China is likely to push banks to reduce loan rates and support the property sector while keeping a lid on the cost of deposits as it loosens policy in support of the government’s target for growth of about 5.5% this year, current and former PBOC officials told MNI in interviews on the sidelines of the National People’s Congress.

“Remaining credit stability” will be “significantly meaningful” to support the government target, said Xu Nuojin, former head of PBOC’s Zhengzhou branch and an NPC deputy, calling for measures including cuts in banks’ reserve requirement ratios (RRRs), the loan prime rate and relending rates for agriculture and small business. The PBOC will also provide targeted tools aimed at key sectors, he said.

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The People’s Bank of China is likely to push banks to reduce loan rates and support the property sector while keeping a lid on the cost of deposits as it loosens policy in support of the government’s target for growth of about 5.5% this year, current and former PBOC officials told MNI in interviews on the sidelines of the National People’s Congress.

“Remaining credit stability” will be “significantly meaningful” to support the government target, said Xu Nuojin, former head of PBOC’s Zhengzhou branch and an NPC deputy, calling for measures including cuts in banks’ reserve requirement ratios (RRRs), the loan prime rate and relending rates for agriculture and small business. The PBOC will also provide targeted tools aimed at key sectors, he said.

Keep reading...Show less