Economy

Chinese Central Bank to Pump Billions Into Markets Amid Coronavirus Fears

Chinese Central Bank to Pump Billions Into Markets Amid Coronavirus Fears”

The People's Bank of China made the announcement in a statement published on its website today.

China's central bank will inject the Chinese economy with $174 billion on Monday amid growth fears from the impact of the coronavirus outbreak.

China's central bank will inject 500 billion yuan ($71.22 billion) through open market operations on Tuesday, traders said, after an injection of 1.2 trillion yuan a day earlier. It added that the overall liquidity of the banking system would be 900 billion yuan ($129 bln) more than in the same period previous year.

The repo rate cut came as Chinese financial markets reopened after an extended Lunar New Year holiday. As of Monday afternoon, Chinese authorities had reported more than 17,000 infections by the virus and at least 361 deaths. Also announcing a range of measures to step up monetary and credit support up to enterprises which are taking initiatives and helping out in its battle against the virus epidemic, including medical enterprises.

Regulators have also urged banks and other financial institutions to stimulate lending and to prevent debt from being raised in areas hit hard by the pandemic.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper. But it also has taken a toll on the Asian giant's economy, with factories slowing down production and the tourism industry suffering a hit due to canceled flights and more countries closing their borders with China.

Economists have warned that the outbreak will add to downside risks for China's economy in the first half of this year.

Do not miss out on the latest news.

China has directed most businesses in Hubei province, the epicentre of the new coroavirus outbreak, to remain shut until at least February 14 amid worries a central bank liquidity boost may fall short in real terms.

The government has pledged to increase the liquidity by using monetary policy tools and to provide support to the companies harmed by the epidemic, which has killed 305 people so far, all but one in China.

It is, however, pertinent to note that the World Bank had forecasted a rebound in global growth this year (2020), following the ease of trade tensions between the United States (U.S.) and China that had contributed to a decline in 2019.



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