China central bank pledges "dynamic adjustment" of RRR policies

China will implement the "dynamic adjustment" of targeted reserve requirement ratio (RRR) cut policies in the near future for better use of inclusive financing to shore up the virus-hit economy, an official from the central bank said Monday.

The People's Bank of China (PBOC) will also step up the utilization of structural monetary policy tools and enable the country's three policy banks to better play their roles, said Chen Yulu, deputy governor of the PBOC.

"Currently, China's monetary policy space and policy tools remain sufficient," Chen stressed.

He urged financial institutions to "give full support" to small businesses, while dismissing concerns that this may lead to more non-performing loans.

The non-performing loan ratio of China's commercial lenders stood at 1.86 percent last year, well below the 5-percent regulatory standard, Chen said.

He also pledged a big increase in the issuance of special bonds to provide sufficient funds to commercial lenders for supporting smaller enterprises.

Peng Lifeng, deputy director of financial markets at the PBOC, told a press briefing on Monday that the epidemic has had an impact on firms' ability to repay bonds in sectors like catering and tourism. But as the aggregate financing scale of these sectors only takes up about 1 percent of the market, the overall default rate will not be pushed up.

(With input from Xinhua)