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Beijing - China’s central bank offered 70.5 billion yuan to its three policy banks under the Pledged Supplementary Lending programme in October, expanding the size of the facility by the most since it began publishing figures in July.
The amount outstanding under the P SL programme in the month was 1.03 trillion yuan, the People’s Bank of China said in a statement.
While the vast majority of the money has gone to China Development Bank, the announcement marked the first time that the PBOC said it was extending PSL loans to Agricultural Development Bank of China and Export- Import Bank of China.
The Pledged Supplementary Lending programme has been used as a central bank tool to encourage investment in areas it favours - chiefly shantytown development.
In today’s announcement, the central bank said it was adding two new purposes for PSL lending: major water projects and projects aimed at promoting use of the yuan overseas.
The three policy banks can borrow the money at an annual rate of 2.85% in exchange for collateral such as bonds or other assets. That’s a discount from China’s benchmark one-year interest rate of 4.35%, and down from offers of 3.1% under the PSL programme in in June.
