China urges swift implementation of expansive financial policies

BEIJING/SHANGHAI (Reuters) -China’s central bank and financial regulators have held meetings with key financial institutions, urging them to swiftly implement expansive policies to support the economy and the capital markets.

The People’s Bank of China (PBOC) said in a statement on its website on Friday that it urged financial institutions to boost credit support for the real economy, and maintain reasonable growth in the total amount of money and credit.

It also urged solid implementation of interest rate adjustments, as well as two funding schemes created to support the stock market.

The meeting, held on Wednesday, was jointly chaired by China’s banking and securities regulators, and participants included banks, brokerages and fund companies.

The PBOC in late September announced the most aggressive monetary support measures since the COVID-19 pandemic, including interest rate cuts, a 1 trillion yuan ($140 billion) liquidity injection and other steps to support property and stock markets.

The central bank also for the first time created two monetary policy tools to support the stock market. They include a swap program for brokerages, funds and insurers to obtain liquidity, and a re-lending facility to fund stock purchases by listed companies.

Swift implementation of these policies will help China meet this year’s 5% growth target, as a prolonged property downturn and weak consumption remain a drag on activity.

China’s economy expanded 4.6% in the third quarter from a year earlier, official data showed on Friday.

The PBOC said it would “strengthen inter-department coordination, create synergies and make full use of the policies to reinvigorate market confidence, improve people’s expectations and promote sustained economic recovery.”

($1 = 7.1224 Chinese yuan renminbi)

(Reporting by Shanghai and Beijing newsroom; Editing by Christian Schmollinger)