The Chinese Central Bank announced an injection of 1.2 billion yuan ($ 175 billion) to support the country’s economy, affected by the coronavirus epidemic that has so far left more than 300 dead. The operation will be carried out today when the financial markets are reopened after the New Year holidays, extended due to the disease that appeared in the city of Wuhan.
Also, the central bank said in a statement that the operation will serve to maintain reasonable and abundant liquidity for the banking system, as well as to stabilize the exchange market. The bank has already announced several measures to facilitate credit to companies that contribute to fighting the coronavirus epidemic.
The People’s Bank of China (PBOC) has lent 900,000 million yuan (150,000 million euros) to loans in seven and 14-day loans. While most of this money is used to offset loans that expire, the new liquidity is 150,000 million yuan, some 20,000 million euros.
The rate for these loans has been cut by 10 basis points, to ensure ample liquidity during the special virus control period, according to a statement from the authority.
The injection of money is part of the support measures announced during the weekend in an attempt to soften the effect on the market and help companies affected by the outbreak of the disease and the extension of extended vacations. While the Chinese government said it is confident that the economic impact of the coronavirus can be minimized and that the central bank and regulators are expected to follow their support measures.
Also, the securities market authority, China Securities Regulatory Commission (CSRC), has banned bearish operations on the Stock Exchange, according to verbal instructions addressed to brokerage houses or charging commissions to customers. He has also verbally asked investment fund managers not to sell shares unless it is to meet repayments.