The People's Bank of China has decided to expand a pilot program to nine provinces/cities, allowing banks to refinance high quality credit assets.

Anbound's senior researcher, He Jun points out the nine pilot provinces/cities share the following features: -

(i)These provinces/cities have large local debt;

(ii)The local economy is stronger and hence the better repayment ability;

(iii)The high demand for funding.

The expansion of the pilot zone means that the central bank is determined to expand its monetary policy box, reflecting the central bank’s intention to maintain loose monetary environment.