People's Bank of China to Expand its Lending Quotas by CNY 200 Billion

The People's Bank of China announced on Friday that it will expand its lending and rediscount quotas by 200 billion yuan ($27.53 billion) to help the farm sector and small businesses despite a sluggish economic recovery. Following a robust post-COVID bounce in consumption, the world's second-largest economy lost pace in the second quarter, prompting calls for additional support.

According to the central bank, the action on Friday will lower financing costs, encourage and grow employment, and aid in economic recovery. According to the central bank, outstanding lending and rediscounting for the agricultural sector and small businesses totaled 2.6 trillion yuan at the end of the first quarter, a record high.Official data on Friday showed China's factory activity declined in June for a third straight month, with weaknesses in other sectors deepening.

The cabinet said on Thursday it planned to take measures to promote household consumption. Earlier this month, China cut key lending benchmark rates to shore up economic activity.