June 1, 2020 / 12:46 PM / 2 months ago

China c.bank creates tool to ease loan pressure on small firms

HONG KONG, June 1 (Reuters) - China’s central bank said on Monday it would establish a loan extension-supporting tool to help ease pressures on small firms in repaying the principal and interest of loans.

The People’s Bank of China (PBOC) will provide 40 billion yuan ($5.61 billion) in relending funds and to conduct interest rate swaps with local banks through a special purpose vehicle (SPV), it said in a statement.

The tool to support loan extensions is expected to help local banks to extend loan principal for about 3.7 trillion yuan, it added. ($1 = 7.1355 Chinese yuan renminbi) (Reporting by Meg Shen in Hong Kong, Kevin Yao and Roxanne Liu in Beijing; Editing by Gareth Jones)

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