China raises relending, rediscounting quotas for farm sector, small firms by $27.5 billion

[June 30, 2023]  BEIJING (Reuters) - China's central bank said on Friday it will increase its relending and rediscount quotas by 200 billion yuan ($27.53 billion) to support the farm sector and small firms, amid faltering economic recovery. 

Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022. REUTERS/Tingshu Wang

The world's second-biggest economy lost momentum in the second quarter following a strong post-COVID rebound in consumption, spurring calls for further stimulus.

Friday's move will reduce financing costs, promote and expand employment and support economic recovery, according to a statement from the central bank.

Outstanding relending and rediscounting for the agricultural sector and small firms amounted to 2.6 trillion yuan as of the end of the first quarter, a record high, according to the central bank.

Official data on Friday showed China's factory activity declined in June for a third straight month, with weaknesses in other sectors deepening.

The cabinet said on Thursday it planned to take measures to promote household consumption. Earlier this month, China cut key lending benchmark rates to shore up economic activity.

($1 = 7.2635 Chinese yuan renminbi)

(Reporting by Liangping Gao and Kevin Yao; editing by Christina Fincher and Mark Heinrich)

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