Loans worth 200 billion yuan. Chinese stock markets soar. The authorities inject additional liquidity into the system to reboot the economy, falling due to the coronovirus crisis.
Beijing (AsiaNews / Agencies) – The Chinese Central Bank (PBOC) has cut interest rates on its medium-term loans today from 3.25% to 3.15%: It is a further measure to stimulate the economy of the country affected by the effects of Wuhan’s coronavirus (Covid-19), which has so far killed more than 1,700 people in China, infecting more than 70,000.
The cut concerns loans granted by the PBOC to national banks for a value of 200 billion yuan (about 26 billion euros).
The measure was greeted immediately with enthusiasm by the Chinese stock exchanges. In the mid-afternoon, Shanghai grew 2.28%, while Shenzhen touched 3%. The two indexes have returned to almost pre-closing levels before the Lunar New Year celebrations and government blocking between late January and early February – on February 3, the two exchanges lost around 8%.
The PBOC injected new liquidity into the financial system, buying securities on the financial market worth 100 billion yuan (13 billion euros). At the beginning of the crisis, it had launched a first stimulus of 1000 billion yuan (132 billion euros).
The goal of the authorities is to encourage access to bank loans to local companies in this time of difficulty. Due to the epidemic crisis, China’s economic growth is expected to slow down to around 5% in 2020, a percentage point lower than in 2019, with a recovery expected in the second phase of the year if the spread of the virus is stopped by April.