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BEIJING (MNI)

The People's Bank of China will continue to tap its structured policy tools in the next five years to boost credit to small and private companies that are at a disadvantage, wrote Liu Guoqiang, the Vice Governor of the People's Bank of China.

Liu referred to two new tools in the article published by the PBOC's China Finance magazine - the PBOC's CNY40 billion re-lending program to encourage commercial banks to postpone loan repayments for small firms to the end of March 2021 and a CNY400 billion fund for commercial banks to provide loans to small companies lacking collateral. Thanks to policies, outstanding lending to small firms grew 30% year-on-year by the end of October, the highest on record, while commercial banks have extended repayment periods for principal amounts and interest totalling CNY4.7 trillion, Liu wrote.

Liu also urged adjustments to special policies announced amid the pandemic to ensure a smooth transition to the post-Covid period and said China will improve on the monetary policy mechanism to ensure that the growth rate of social financing and M2 matches that of nominal GPD in the next five years.

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