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Finance

China injects $80bn in liquidity for virus-hit small businesses

Central bank will lower required reserves for lenders that meet targets

A small shop in Wuhan, China. The country's small businesses and individual proprietorships have been especially hit hard by the coronavirus pandemic.   © Reuters

BEIJING -- China's central bank said Friday it will spur lenders to provide desperately needed cash to small businesses battered by the coronavirus outbreak in a move that will unleash 550 billion yuan ($78.5 billion).

The People's Bank of China will trim the reserve ratio requirement by half to 1 percentage point for banks that meet lending targets. The cuts, effective Monday, will be the second such reduction since January. The move will also result in banks benefiting from 8.5 billion-yuan reduction in interest costs, the central bank said.

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