To The Moon

The People's Bank of China has adjusted and improved several monetary policy tools, lowering the interest rate on Pledged Supplementary Lending (PSL) by 0.25 percentage points.

The one-year PSL rate has been reduced from 1.75% to 1.5%, to better incentivize policy banks to support the real economy and serve national strategies.

At the same time, the scope of PSL support has been expanded.

The construction of the "six major networks" 鈥?water networks, new-type power grids, computing power networks, next-generation communication networks, urban underground pipeline networks, and logistics networks 鈥?has been included in the areas supported by Pledged Supplementary Lending, guiding policy banks to increase financial support for the construction of these "six major networks," helping to expand effective investment and deeply tap the potential of domestic demand.

PBOC Adjusts and Improves Several Monetary Policy Tools

In order to implement the spirit of the Political Bureau of the Central Committee meeting and the arrangements of the State Council executive meeting, implement a moderately accommodative monetary policy, and on the basis of fully leveraging the effectiveness of various existing policies, the People's Bank of China has decided to further adjust and improve several monetary policy tools, so as to create an appropriate monetary and financial environment for stable economic growth, high-quality development, and the stable operation of financial markets, promote the sustained and positive development of the economy, and support a good start for the "15th Five-Year Plan."

First, the interest rate on Pledged Supplementary Lending (PSL) is lowered by 0.25 percentage points. The one-year PSL rate has been reduced from 1.75% to 1.5%, to better incentivize policy banks to support the real economy and serve national strategies.

Second, the scope of PSL support is expanded. The construction of the "six major networks" 鈥?water networks, new-type power grids, computing power networks, next-generation communication networks, urban underground pipeline networks, and logistics networks 鈥?has been included in the areas supported by Pledged Supplementary Lending, guiding policy banks to increase financial support for the construction of these "six major networks," helping to expand effective investment and deeply tap the potential of domestic demand.

Third, the quota for relending for technological innovation and technological upgrading is increased by 200 billion yuan, and the support ratio for this relending is uniformly raised from 60% to 100%. After the increase, the quota for relending for technological innovation and technological upgrading will rise from 1.2 trillion yuan to 1.4 trillion yuan, with a higher support ratio, which will help guide banks to increase lending to small and medium-sized technology enterprises and better support enterprises in expanding investment in equipment upgrades in key areas.

Fourth, the quota for relending to support agriculture and small businesses is increased by 500 billion yuan, of which the quota for relending to private enterprises is increased by 300 billion yuan. After the increase, the combined quota for relending to support agriculture and small businesses and rediscounting will rise from 4.35 trillion yuan to 4.85 trillion yuan, of which the quota for relending to private enterprises will increase from 1 trillion yuan to 1.3 trillion yuan. This will further incentivize local legal-person banks to increase credit support for agriculture-related and small and micro enterprises, especially small, medium, and micro private enterprises.

The People's Bank of China will continue to comprehensively use various monetary policy tools in accordance with macroeconomic conditions, price trends, and the needs of macroeconomic regulation, maintain ample liquidity, guide and regulate interest rate levels well, and serve the high-quality development of the real economy.