Central Bank Governor Says China to Issue Low-Cost Loans to Reduce Emissions

BEIJING: China’s central bank will grant first batch of low-cost loans to financial institutions by the end of the month to enable carbon emission reductions, state agency Xinhua reported on Tuesday, citing an interview. with central bank governor Yi Gang.

The People’s Bank of China (PBOC) announced in November that it would provide 60% of the principal of the loan taken out by financial institutions for carbon reduction, with a one-year loan rate of 1.75%, without specify when the loan would be issued. .

The measure is in line with China’s broader goal of peaking emissions by 2030 and achieving carbon neutrality by 2060, as well as protecting the economy from the fallout from the COVID-pandemic. 19.

China’s economy, the world’s largest after the United States, faces the triple pressure of falling demand, supply issues and weakening expectations, Yi said, reiterating his official comment. previous.

“The macroeconomic market must be stabilized,” he told Xinhua. “In addition, we must let company shareholders and local communities take responsibility for risky events in the market.

Yi said the PBOC will keep its monetary policy flexible and appropriate, and its abundant liquidity.

To further ease the pressure on businesses, which can typically get business loans with an average interest rate of 5%, a record high, Yi said, the PBOC will increase the small business refinancing quota if necessary.

He also said financial risks were under control and expectations for the real estate market have improved.

“The structural adjustment of the real estate market is conducive to the formation of a new development model for the country’s real estate and the healthy development of the entire sector,” Yi said.

(Reporting by Cheng Leng, Ryan Woo and Beijing Newsroom; Editing by Himani Sarkar and Barbara Lewis)

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