MNI POLICY: PBOC to Cut Targeted RRRs At Right Time: PBOC Liu

By Archie Zhang

     BEIJING (MNI) - The People's Bank of China(PBOC) will cut the reserve

requirement ratios for targeted banks to boost support to SMEs heavily impacted

by the epidemic at the proper time, Deputy Governor Liu Guoqiang said Thursday.

     The central bank will continue with reform of the Loan Prime Rate and

further guide market rates lower, Liu said at a press conference.

     Here are other takeaways from the press conference:

     - The business resumption ratio reached 32.8% on Wednesday, up from 29.6%

on last Sunday, according to Zhang Kejian, a vice minister of Industry and

Information Technology. The ministry will provide virus prevention equipment to

companies and shorten the approval process encouraging companies to resume

operations, Zhang added.

     - China will encourage small and middle-size banks to recapitalize and

speed up the process of finding strategic investors, said Xiao Yuanqi, the

spokesman for the China Banking and Insurance Regulatory Commission.

     - Bank risk management won't be relaxed when they provide services to the

companies; banks should also make sure relief measures only goes to firms

affected by the virus, Xiao said.

     - In total, 1,008 companies in the virus prevention field have obtained

preferential loans at an average rate of 1.28%, lower than the State Council's

requested 1.6%, following the PBOC announcing the 300 billion special re-lending

for 19 banks, Liu said.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com