MNI BRIEF: PBOC CNY500 Bln Relending Tool To Boost Consumption

The People’s Bank of China announced Tuesday that it will introduce a CNY500 billion re-lending facility for service consumption and elderly care in a bid to enhance credit supply and develop diversified financing channels for boosting consumption. 
According to a statement on the Bank’s website, the PBOC will use tools including cuts in reserve requirement ratios, relending facilities, and open market operations to maintain ample liquidity and reduce overall financing costs.  The Bank will facilitate long-term capital to stabilise the stock market, it said. 
The Bank will offer targeted monetary policy incentives to encourage financial institutions to lend to hospitality, catering, tourism, education and other service sectors, and to expand startup loan guarantee programs while providing innovative wealth management products for households. 
The central bank will encourage pilot zones to actively yet prudently advance the use of e-CNY in consumption, it said. (See MNI: Tariffs, Weak Demand To Drive Moderate PBOC Easing In H2)