China’s latest attempts to prop up its stalling property market is expected to provide a “modest boost” to property sales, according to BNP Paribas. Last week, The People’s Bank of China PBOC announced that it is setting up a Rmb300 billion $42 billion fund of relending to support local governments and banks for the purchases of unfinished homes, with the aim of then providing them as low cost housing when finished.
The relending rate of the stimulus is 1.75%, and banks usually add a reasonable premium on top of that, so the overall lending rate should be above 2%, according to BNP Paribas. In addition, the amount of relending...
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