China’s central bank urges lenders to step up support for real economy

China’s central bank has urged the country’s lenders to step up support for the real economy and meet credit demand as the world’s second-largest economy faces increased downward pressure.

In a meeting with 24 financial institutions, the People’s Bank of China and China’s banking regulator urged lenders to “do their utmost to stabilize the fundamentals of the economy,” the PBOC said in a statement on Tuesday.

The PBOC urged banks to make full use of different policy tools and support “high quality” economic growth by expanding credit “as appropriate.” He also asked banks to maintain a steady increase in home lending, after a series of policy easings recently to save the economy from a prolonged housing slump.

The central bank has listed sectors – including small businesses, green development, technological innovation and energy supply – as key sectors that should receive financial support from banks. He also asked banks to defer and defer repayment of loans to small businesses, truckers and individuals hit hard by the pandemic, while accelerating the provision of loans to businesses and individuals.

New loan growth in China slumped in April as residential mortgages contracted due to massive city shutdowns and strict Covid-19 control measures that hampered lending and dampened demand credit. Several major economic indicators, including consumer spending and industrial production, fell sharply from a year earlier in April, prompting investment banks to lower their forecasts.

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