Central bank ups credit support to agriculture

The People's Bank of China, the country's central bank, has set aside another 20 billion yuan ($3.24 billion) for a scheme designed to funnel credit into agriculture, it announced on Wednesday.

The money has been allocated to a relending program, under which the central bank extends loans to commercial banks on the condition that they in turn lend to businesses in required sectors.

The move follows a State Council meeting last month that saw pledges to boost agriculture by increasing the scale of relending and also re-discount programs, which allow the central bank to pump funds into commercial banks by purchasing their bills.

On Aug. 8, the central bank added 12 billion yuan to the re-discount quota.

Authorities hope the policies will help support growth in agriculture while stemming credit flow to undesired sectors.

Earlier this year, the central bank cut the reserve requirement ratio for banks engaged in proportionate lending to the farming sector or small enterprises.