(Bloomberg) -- China's central bank pledged to keep overall loan growth stable and facilitate financing for the property sector to aid the economy's recovery.
The People's Bank of China will keep financing for the real estate sector stable via channels including bonds and loans, while accelerating efforts to explore a new development model for the industry, according to a statement after a meeting on major tasks for the second half. The central bank will also ensure liquidity is “reasonably ample” by using multiple monetary tools.
The PBOC's statement follows growing signs of the economy's weakness, with manufacturing activity unexpectedly contracting in July and the property sector's woes deepening. Outstanding loans to the property sector rose at the slowest pace on record as of June, as banks were cautious about lending to cash-strapped developers while homebuyers' demand for mortgages remained weak.
The central bank also vowed to resolve risks in major areas in a prudent manner, including defusing risks at small and medium-sized lenders, according to the statement.
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