China’s central bank, along with financial regulators, recently held meetings with major financial institutions, urging them to take immediate measures to bolster the economy and support capital markets.
The People’s Bank of China (PBOC) called on financial institutions to increase credit support to the real economy and ensure a stable growth of monetary supply and credit, according to a statement on the PBOC’s official website. The central bank also encouraged adjustments to interest rates and endorsed two financing schemes aimed at supporting the stock market.
The meeting, co-chaired by China’s banking and securities regulatory bodies, was attended by representatives from banks, brokerages, and stock companies.
In late September, the PBOC implemented aggressive monetary measures to stabilize the property and stock markets in the aftermath of the COVID-19 pandemic. For the first time in its history, the central bank introduced two monetary policy instruments designed to support the stock market: a swap program for brokers, funds, and insurers, and a loan re-issuance facility to enable these institutions to purchase shares.
The swift implementation of these tools is expected to help China achieve its targeted 5% economic growth for the year.
The PBOC stated it would “enhance inter-departmental coordination, create synergies, and fully leverage these tools to strengthen market confidence, improve public expectations, and promote sustainable economic recovery”
It is noteworthy that recent data shows China’s economy grew by 4.6% in the third quarter of 2023.
