China News Service, Beijing, November 4 (Tao Siyue) The People's Bank of China announced on the 4th that it will lower the stock repurchase and increase re-lending interest rate by 0.25 percentage points to 1% from now on, and step up the implementation of the stock repurchase and increase re-lending policy. The policy supports 21 national banks and 5 systemically important city commercial banks. The support ratio is 100% and the period is 1 year, which can be extended according to the needs of the banks.
Stock repurchase and holding increase re-lending is a monetary policy tool created by the central bank in conjunction with relevant departments in October 2024. By providing re-lending support to banks, it guides banks to issue loans to qualified listed companies and major shareholders for the purpose of repurchasing or increasing company stock holdings.
In December 2024, the maximum period for stock repurchases and holdings and re-lending was extended from 1 year to 3 years, and the proportion of self-owned funds required for listed companies to repurchase and increase their stock holdings was reduced from 30% to 10%, further reducing the difficulty and cost for market entities to obtain loans; in January 2026, the central bank lowered the interest rate of this tool to 1.25% to better exert the incentive effect of the tool.
In order to support the healthy and stable development of the capital market, on November 2 this year, the Central Bank of China, the State Administration of Financial Supervision, and the China Securities Regulatory Commission jointly held a symposium on stock repurchases, holdings, and re-lending. The central bank revealed that after the symposium, banks had submitted applications for stock buybacks, holdings increase and re-loan quotas exceeding 200 billion yuan.
It is understood that this time the central bank has stepped up the implementation of the stock repurchase and holdings increase re-lending policy, clarifying that banks can appropriately add points to the re-lending interest rate, reasonably determine the loan period and interest rate for stock repurchase and holdings increase, speed up loan disbursement, and enhance the market value management capabilities of listed companies and major shareholders.
Ru Lixian, vice president of Linuo Group, said in an interview with China News Service that the group's business financing costs for special loans are controlled at around 2%, which is significantly lower than general working capital loans of the same period; and the loan period is generally three years, which matches the operating rhythm and market value management cycle, and avoids short-term leverage for "statement", which is substantial in stabilizing expectations.
Dong Ximiao, chief economist of China Merchants Union, said that the stock repurchase and holding refinancing interest rate has been reduced to 1%, which has improved the macro capital price signal, enabled low-cost funds to flow more smoothly to companies with real repurchase needs, promoted the coordination of direct financing and indirect financing, and improved the balance sheet expectations of micro entities.
Pan Gongsheng, Governor of the People's Bank of China, discussed the next steps in financial work in Beijing on November 3, saying that he will continue to implement a moderately loose monetary policy; implement monetary policy tools to support the capital market; consolidate and improve the capital market stabilization mechanism; and maintain the smooth operation of financial markets such as stocks, bonds, and foreign exchange.
