Published: Thu, February 06, 2020
Money | By Ethel Goodwin

Chinese Central Bank to Pump Billions Into Markets Amid Coronavirus Fears

Chinese Central Bank to Pump Billions Into Markets Amid Coronavirus Fears

In order to further stabilise the currency market as the nation deals with the epidemic, the banking system would be 900 billion yuan more than it was in the same period previous year.

The Beijing-based press agency Xinhua said today that China's economy has endured the blow caused by the epidemic, adding that comments made by a USA federal official that the virus could return some jobs back to the United States were "self-centred, unprofessional and unethical".

The moves came as China's financial markets reopened after the extended Lunar New Year break which began January 24.

China's death toll from the virus increased to 304 on Sunday amid warnings from the World Health Organization that other countries need to be prepared in the event the disease spreads among their populations.

China's central bank has said on February 2 that it will pump $173 billion into the economy to help fight the nationwide outbreak of the Coronavirus. The People's Bank of China have declared that they would cut short-term rates and inoculate Dollars 1.2 trillion of liquidity into the financial system.

The People's Bank of China (PBOC) says it will launch a 1.2 trillion yuan reverse repurchase operation.

That will lower the costs of lending where the central bank purchases securities from commercial banks and sells them back later.

The US was also one of the countries which have been isolating citizens who travelled to the Chinese city of Wuhan which has also been identified as the epicentre of the outbreak.

China's finance ministry will give subsidies on interest payments for some firms hit by the spreading coronavirus outbreak, state-run newspaper Guangming Daily reported on Monday. Instead employees are encouraged to work from home. The US, India, Australia, Indonesia, Singapore, Israel, Russia, New Zealand and the Philippines have all imposed restrictions on visitors from China.

Malpass said the coronavirus outbreak posed a real threat to World Bank's last month's prediction on the global economic growth. According to him, the latest cuts in the short term rates is not going directly to offset the drag on economic activity from Chinese authorities' response to the widespread especially for travel bans and business closures. It also cut first-quarter growth expectations to 4.8 per cent, compared with 6 per cent in the fourth quarter of 2019.

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