Central bank to expand relending plan

The People's Bank of China, the central bank, is planning to expand its relending pilot program to nine more provinces and municipalities, as part of its efforts to lower financing costs and shore up economic growth.

The PBOC statement over the weekend that it would expand the program allowing banks to refinance high-quality credit assets, has once again triggered discussions on whether a Chinese quantitative easing, or QE, is in the works. The PBOC launched its pilot relending program in Shandong and Guangdong provinces last year.

According to the PBOC statement, high-quality credit assets issued by financial institutions in the pilot regions can be collateralized for relending from the PBOC, after it passes the central bank's assessment.