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PBOC to Start New Medium-Term Lending Tool in January, Yi Says

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Bloomberg’s Malcolm Scott reports on China’s latest efforts to support the slowing economy.(Source: Bloomberg)

The Chinese central bank will start lending money to banks under a new policy instrument in late January, the governor announced in an interview, promising that China will avoid both massive stimulus and a fast credit contraction.

The targeted Medium Term Lending Facility, which lends cash for up to three years, was announced in December and will encourage banks to lend to small and private companies which are facing credit shortages due to a government debt crackdown. China is trying to balance funneling more cash to the real economy without hampering its campaign to clean up excess debt and financial risk.