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China to step up financial support in virus fight: Central bank

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Passengers wearing facemasks arrive from different provinces at the Beijing Railway Station on February 1, 2020. (Photo by AFP)

China will step up monetary and credit support to enterprises helping its fight against the deadly new coronavirus, the central bank says, as the disease threatens to further dent a slowing economy.

The government will provide support to key enterprises, urging financial institutions to provide "sufficient credit resources" to hospitals and other medical organisations, the People's Bank of China (PBOC) said in a statement on Saturday.

This is to help with their financial needs in areas ranging from buying medical supplies to building public health infrastructure.

The PBOC added that it will "maintain reasonable and sufficient liquidity", using policy tools such as open market operations to release sufficient liquidity into the financial market.

It added that there should be differentiated financial services provided to regions and industries hit by the virus epidemic.

It called on financial institutions to avoid "blindly" cutting off loans from industries such as wholesale and retail, as well as small and micro enterprises.

Key sectors such as manufacturing will also see better credit support, it added.

"Financial institutions should ... continue to increase support for small and micro enterprises, as well as private enterprises," said the PBOC.

The central bank will also tap lower lending rates, an increase of credit loans, as well as medium- and long-term loans to help enterprises overcome the impact of the epidemic.

Financial institutions should also allow flexible repayment where needed, on credit loans for those who temporarily lose their income sources due to the epidemic.

This photo taken on January 28, 2020 shows medical staff members cheering up a patient infected by the novel coronavirus in an isolation ward at a hospital in Zouping in China. (Photo by AFP)

The SARS-like virus that spread from the central Chinese city of Wuhan -- in Hubei province -- has killed more than 250 people and infected nearly 12,000 across the country.

With cities in Hubei on lockdown and travel restrictions on Chinese citizens around the world, analysts are expecting economic growth to take a hit.

Some believe a prolonged outbreak could see full-year growth coming in at five percent or below.

China's economy grew at 6.1 percent for 2019, the slowest in around three decades.

(Source: AFP)

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