* China wants to rebuilt dilapidated towns
* Part of efforts to pump-prime economy (Writes through)
BEIJING, July 1 (Reuters) - China’s central bank extended $25 billion in subsidised loans to its top development bank last month in yet another attempt to lift its flagging economy and increase funding for sectors feeling the pinch.
The People’s Bank of China (PBOC) said in a statement on its website that it had lent 157.6 billion yuan ($25.4 billion) to China Development Bank (CDB) in June to finance the refurbishment of shanty towns.
China wants to rebuild more dilapidated towns this year as part of efforts to pump-prime the world’s second-largest economy as its growth grinds towards a 25-year low.
The loans to CDB, which were extended under the Pledged Supplementary Lending programme, were made at 3.1 percent. The maturities of the loans were not disclosed.
The central bank created the programme last year as a way to manage interest rates and liquidity levels by offering low-cost loans to select banks.
The PBOC said in a separate statement that it had extended other loans to banks under its medium-term lending facility, or MLF, a programme that is also designed to keep interest rates low and liquidity ample.
China had 514.5 billion yuan worth of MLF loans in its banking system at the end of last month, the PBOC said. This was after it had injected 130 billion yuan worth of six-month MLF loans in June, while withdrawing 670 billion yuan in loans in the same month.
As in previous months, the MLF loans were disbursed to encourage banks to lend to sectors such as agriculture deemed most vulnerable to China’s slowdown.
$1 = 6.2008 Chinese yuan Reporting by Koh Gui Qing; Editing by Nick Macfie