China unveils plan for targeted lending to aid growth

Beijing

CHINA'S central bank said it will reduce the amount of cash lenders must hold as reserves from next year, with the size of the cut linked to the flow of funding to parts of the economy where credit is scarce.

The targeted measures apply to all major banks, 90 per cent of city commercial banks, and 95 per cent of rural commercial lenders, the People's Bank of China (PBOC) said in a statement late on Saturday.

Cuts will range from 0.5 percentage point to 1.5 percentage points depending on how much business banks do with small enterprises, agricultural borrowers and startups.

Foreign banks will also be eligible for the cut should they meet the requirements.

Further details:

The targeted reduction is a "structural adjustment" and isn't a shift in monetary policy, the central bank said in a separate Q&A statement…