BEIJING, June 6 (Reuters) - China’s central bank has lent 100 billion yuan ($16 billion) to some small- and medium-sized banks to allow them to re-lend the cash to agricultural projects, two sources with knowledge of the situation told Reuters on Friday.
Beijing has promised they would disburse more loans to commercial banks via the “re-lending” schemes in last week’s cabinet meeting, as a way to increase liquidity in the system and support economic growth.
Banks had received the latest loans at the end of May, the sources said.
“This time, the 100 billion yuan worth of funds are targeted at small- and medium-sized banks and several banks are involved,” said a source with knowledge of the situation but who spoke on condition of anonymity.
“The focus is to support areas related to agriculture.”
The central bank, the People’s Bank of China, was not available for comment.
The central bank conducted its last “re-lending” exercise in May when it lent 300 billion yuan ($48.1 billion) to China Development Bank to refurbish shanty towns.
China has announced a series of modest stimulus measures in recent months after the economy got off to a weak start this year. Growth had cooled to an 18-month low of 7.4 percent between January and March.
Business surveys released in the past week showed activity may be stabilising, but a slight pick-up in parts of the economy does not mean a solid, broader recovery is under way.
$1 = 6.2548 Chinese yuan Reporting By Xiaowen Bi and Koh Gui Qing; Writing by Shao Xiaoyi; Editing by Jacqueline Wong