The People's Bank of China (PBOC) said on Wednesday it has set up a Targeted Medium-term Lending Facility (TMLF) to boost the real economy. It will be available for three years, with an interest rate of 3.15 percent.
The PBOC came up with the new lending policy to support micro and small-sized enterprises as well as private companies, which is line with the guidelines of the central government, according to a statement published on the website of the PBOC on Wednesday. Large commercial banks, joint-stock commercial banks and large city commercial banks with sustainable asset status can apply for the TMLF to further support those companies, the statement noted.
The new lending facility has a lower interest rate than the Medium-term Lending Facility, another funding channel.
The PBOC will also boost relending and rediscount quotas for small firms by 100 billion yuan ($14.5 billion), it said in the statement.
The latest move will give financial support for almost all financial institutions, which will also help lower financing costs for companies, E Yongjian, a researcher with Bank of Communications said in a research note sent to the Global Times. "Future monetary policy will remain neutral and stable, keeping liquidity reasonable and increasing targeted support," he said.
