China to help with credit support for virus-hit companies
The regulator has pledged to provide more credit lines and simplify the credit approval process for such firms
Beijing — Financial regulators in Guangdong province in southern China and in Beijing have unveiled detailed measures to support firms hit by the coronavirus outbreak amid worries about a sharper economic slowdown.
The banking and insurance regulator in Guangdong, China's export hub, has pledged to provide support for firms in retail, wholesale, catering, logistics, transportation and tourism sectors that have been hit by the outbreak.
Banks and other financial institutions in Guangdong need to take measures such as delaying loan repayment deadlines and cutting interest rates to help firms, the regulator said in a statement.
The regulator also pledged to provide more credit lines and simplify the credit approval process for such firms.
The regulator in Beijing has taken similar steps to support services firms hurt by the epidemic, telling banks to lower interest rates appropriately and debt-clearing firms to acquire non-performing assets from struggling firms.
The China Banking and Insurance Regulatory Commission (CBIRC) has urged banks not to cut off lending to firms facing difficulties and encouraged banks to reduce loan interest rates for firms hit by the outbreak.
China's economic growth may drop to 5% or even lower due to the coronavirus outbreak, possibly pushing policymakers to introduce more stimulus measures, a government economist has said.
Analysts at Nomura believed the virus outbreak could cut China's first-quarter economic growth by two percentage points.
“We expect more detailed measures in coming days. RRR cuts, rate cuts, various lending facilities, and open market operations all are possible options,” they said in the report. “We believe the People's Bank of China may also roll out some targeted credit easing measures, to help corporates and households that are likely to suffer more from the virus outbreak.”
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