China releases its monetary policy, but tightens online bank loans conditions

China's central bank announced on Sunday, it will perform its macro-prudential policy more flexibly - taking into account the economic cycle. Its aim is to support economy and eliminate financial risks endangering its recovery.

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People´s Bank of China (PBOC), China’s central bank, will continue in interest rates cuts for loans in banking sector. Moreover, PBOC aims to perform intervention on the foreign currency market, so that the Chinese Yuan remains stable and in values supporting Chinese economy. Similarly, the China’s central bank plans to pump the economy with bond purchases to support financial sector liquidity.

On the other hand, conditions for online bank loans are being tightened up. With loans provided over the internet, it will no longer be possible to purchase assets, shares, bonds or financial derivatives. The regulation was issued by China Banking Regulatory Commission. Furthermore, online loans could reach maximum 200,000 Chinese Yuan, that is around $28,000. The regulator aims to lower risks, which the financial sector is currently facing due to economic recession.


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