BEIJING — China’s central bank has extended 4.97 billion yuan ($757.6 million) of loans through its credit-asset pledged relending program as of the end of 2015, it said on Jan 11.
The program, first piloted in Shandong and Guangdong in 2014, allows financial institutions to refinance high-quality credit assets rated by the People’s Bank of China (PBOC). The PBOC lends money to commercial banks which use these credit assets as a pledge.
In October, the central bank expanded the program to nine more municipalities and provinces including Shanghai, Tianjin, Beijing and Chongqing to help cut borrowing costs and guide more funds to agriculture and small enterprises.
The PBOC said it will “steadily advance” the relending program in 2016.
Relending is a big part of central banks’ base money supply worldwide, but the PBOC previously had a strict requirement of accepting only government bonds, bonds from policy banks and top-rated corporate bonds as collateral.