China central bank to step up policy measures to boost economy ahead of party congress

BEIJING (Reuters) -China’s central bank will step up implementation of prudent monetary policy and provide stronger support for the real economy, its governor, Yi Gang, said, according to a statement from the People’s Bank of China (PBOC) on Friday.

Yi made the remarks ahead of an all-important Communist Party Congress on Sunday at a G20 finance minister and central bank governor meeting dated Oct. 13.

The PBOC has increasingly relied on structural, or targeted policy tools, including low-cost loans, to support the slowing economy, as it faces limited room to cut interest rates for fear of fuelling capital flight and inflation.

Yi said the PBOC will put emphasis on supporting infrastructure construction and quicken the pace to utilise loans to deliver home projects. He also said the central bank would support financial institutions to issue loans for equipment upgrade to key sectors, including manufacturing.

The central bank said in late September that it had set up a relending facility worth more than 200 billion yuan ($27.6 billion) to help manufacturers and other companies upgrade their equipment.

It also said Chinese local governments could relax the interest rate limit for commercial housing loans for first home buyers in some cities in phases.

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