China bank applications for PBOC stock loan scheme exceed 200 billion yuan
The People's Bank of China is reducing relending interest rates to support share buybacks and stabilise the country's capital markets.
Applications from banks for a stock-purchase loan scheme backed by the People's Bank of China (PBOC) have exceeded 200 billion yuan ($30 billion), according to The Economic Times.
The central bank said on Wednesday that it has increased relending and stepped up the implementation of policies to support share buybacks and maintain stable capital market operations.
Starting Wednesday, the PBOC will reduce the interest rate on relending for share acquisitions and buybacks by 25 basis points, bringing it down to 1%.
Banks will be permitted to add a reasonable spread to the relending rate when they determine interest rates and maturity for these loans.
The measure aims to accelerate loan disbursements and boost the market capitalisation of major shareholders and listed companies.
The PBOC, alongside securities and financial regulators, met with major banks on Monday to discuss ways to optimise the relending policy.
