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What China Is Doing to Support Financial Markets

What China Is Doing to Support Financial Markets

(Bloomberg) -- China’s policy makers are taking various steps to protect the financial system and capital markets from the fallout from the coronavirus outbreak.

Here’s a list of measures announced by the central bank and finance regulators over the weekend. The nation’s stocks, bonds, foreign exchange, futures and interbank markets all resume trading on Monday.

People’s Bank of China
  • Supply 1.2 trillion yuan ($174 billion) to money markets on Monday, meaning a net 150 billion yuan injection
  • Provide banks 300 billion yuan in money for relending
  • Use open market operations and other tools to ensure sufficient liquidity, keep money market rates stable
  • Temporarily remove the cap on forex debt for some firms
  • Be less strict in checking banks’ required reserves at the end of January
China Banking and Insurance Regulatory Commission
  • Lower lending rates and fees for companies and regions most affected by the outbreak
  • Suitably extend the grace period for firms that have difficulty meeting the end-2020 deadline to comply with new asset management rules
  • Allow some insurers to raise their investment in equities from the current limit of 30% of assets
  • Maintain the pace of overall credit expansion and continue to lower borrowing costs across China, especially to manufacturers, and to small and private firms
  • Encourage banks not to call in loans to firms affected by the virus, especially smaller ones; consider rolling over loans
China Securities Regulatory Commission
  • Temporarily halt night sessions for futures trading from Feb. 3
  • Allow some share pledge contracts to be extended by as much as six months
  • Allow listed companies to apply to delay reporting financial results for 2019 and first quarter of 2020
  • Streamline corporate bond sales, including by allowing financial institutions to submit materials online
  • Raise financing quota for some brokerages and encourage them to boost capital

To contact Bloomberg News staff for this story: Lucille Liu in Beijing at xliu621@bloomberg.net;Jun Luo in Shanghai at jluo6@bloomberg.net

To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, James Mayger

©2020 Bloomberg L.P.

With assistance from Bloomberg