Firms making overseas loans: China raises macro prudential adjustment coefficient

BEIJING: China’s central bank has raised its macro prudential adjustment coefficient for domestic firms making overseas loans to 0.5 from 0.3.

After the adjustment, the upper limit of overseas loans made by domestic firms will be increased accordingly, the central bank said in a statement on Tuesday.

The move will help meet Chinese companies’ demand for capital when they make overseas investments, and help expand the cross-border use of the Chinese yuan, the central bank said.

In December, the central bank tightened the way it assesses cross-border financing risks for companies as China’s economy stages a strong recovery from the Covid-19 pandemic.