PBOC to keep liquidity ample amid coronavirus outbreak
The People's Bank of China headquarters in Beijing, February 26, 2018.

The People's Bank of China headquarters in Beijing, February 26, 2018.

China's central bank said it will use various monetary policy tools to ensure that liquidity remains reasonably ample amid the coronavirus outbreak.

The People's Bank of China (PBOC) said it will appropriately lower lending rates to support firms affected by the virus outbreak. It emphasized that banks should not withdraw loans from companies affected by the outbreak, especially smaller firms, or deliberately withhold loans to sectors most affected by the outbreak such as retail, catering, logistics, and tourism.

The bank said it will facilitate companies' use of foreign exchange to ensure smooth imports of goods needed to prevent and control the epidemic.

The statement continued that for people who have temporarily lost their income source due to the epidemic, financial institutions should appropriately postpone personal loan repayment on mortgages and credit cards.

During the epidemic prevention and control period, the PBOC will provide a total of 300 billion yuan (43.4 billion U.S. dollars) in special relending funds to major national banks and some local banks in key provinces like Hubei, PBOC Deputy Governor Pan Gongsheng said in interview on Saturday.

The bank will "keep close contact with financial institutions and financial markets to stay fully on top of the liquidity situation and demand," said Pan.

The joint statement was issued by China's banking and insurance, securities, foreign exchange regulators and finance ministry, aiming at helping companies, banks and individuals hurt by the viral outbreak.