China's PBOC pledges policy support to counter pandemic woes

© Reuters. FILE PHOTO: Headquarters of the People's Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018. REUTERS/Jason Lee

SINGAPORE (Reuters) - China's central bank on Wednesday pledged monetary policy support to ensure ample liquidity, help businesses badly hit by the latest COVID-19 outbreak in the country and support a recovery in consumption.

The remarks came after a top decision-making body of the ruling Communist Party last week also vowed to support the economy.

"(We shall) waste no time planning incremental policy tools to support steady economic growth, stabilise employment and prices ... to provide a fair monetary and financial environment," the People's Bank of China said in a statement on Wednesday.

It did not detail what measures it could take.

Financing institutions should aim to meet the needs of the real economy, the PBOC said, such as boosting financing for small firms with lower costs, helping import and export firms, as well as the service sector and aviation companies which have been badly hit by the pandemic.

The bank also called for "stable and orderly" growth in financing the real estate sector, which has experienced a prolonged slowdown in recent months.

Economists say Beijing's target for economic growth of about 5.5% this year will be hard to achieve without significant stimulus, as lockdowns and other tough curbs to battle the pandemic cause havoc in supply chains.

In a separate statement, the PBOC said it had allocated an additional 100 billion yuan ($15.13 billion) worth of loans dedicated to coal production and storage, part of Beijing's efforts to boost energy security and stabilise supply chains.

The funding is on top of a 200 billion yuan loan the government allotted in late 2021 for the coal industry including projects such as smart coal mining.

($1 = 6.6080 Chinese yuan renminbi)