Beijing tipped to further ease monetary policy

China mainland government rolled out policies to further ease its monetary policy and loosen the funding tap for small and medium-sized enterprises (SMEs).

The People's Bank of China was likely to lower the level of reserves it requires lenders to maintain by another two to three rounds in coming months.

Last Friday, the central bank lowered the so-called reserve requirement ratio by half a percentage point to 20.5 per cent for larger banks and 18.5 per cent for smaller banks, releasing an estimated 400 billion yuan (HK$492.67 billion) in additional lending supply.

Hung said he believed that further monetary easing was necessary to strike a balance between the mainland's economic growth and consumer price inflation.

While more funding was made available across the border, SMEs in Hong Kong were also given greater access to financing through the Hong Kong government offer of guaranteeing up to 80 per cent of loans in a HK$100 billion financing scheme revealed earlier this month, he said.

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