The People’s Bank of China is injecting 500bn yuan (£50bn) into the country’s top five state-owned banks in an attempt too boost its slowing economy, the FT reports.
The news of the stimulus measures have come from local media reports in China.
The central bank will hand out a $100bn low-interest loan over a period of three months to the Industrial & Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, Bank of China and the Bank of Communications.
The measures came into effect on Tuesday, the reports say, with the central bank expected to complete the first stage of the transfers today.
The stimulus is said to be an attempt to boost investment and business confidence in the Chinese economy after signs of continued weakness in key economic data including industrial output and foreign investment.
Some analysts believe that this is only a short-term move by the central bank to prevent the risk of liquidity shortfalls that are often created during public holidays in China. The country’s “Golden Week” break begins on 1 October.
Citi economist Shen Minggao argues that the central bank could also be an attempt to counter the down-cycle in the property sector. He says: “If the news is true, we believe the PBoC is maintaining an easing bias in its monetary policy stance to neutralise the property-sector down-cycle.”