China central bank governor says lending rates for small firms still high

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03/10/2019 | 04:54 am
BEIJING (Reuters) - China's central bank chief said on Sunday that lending rates for small firms are still relatively elevated due to high risk premiums.

China will push ahead with reforms in its interest rates to help resolve the risk premium problem, People's Bank of China (PBOC) Governor Yi Gang said at a press conference on the sidelines of the country's annual meeting of parliament.

High risk premiums on loans to small firms reflect commercial banks' traditional reluctance to extend credit to the sector because of concerns about their creditworthiness.

China will push for market-based interest rate reforms and supply-side structural reforms to help lower risk premiums, Yi said.

Yi also added that there is still some room for cutting reserve requirement ratios (RRRs), but the amount of room is less compared with a few years ago.

(Reporting by Kevin Yao and Yawen Chen; Writing by Ryan Woo and Lusha Zhang; editing by Christian Schmollinger)

Thomson Reuters 2019
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