PBoC asks state banks to roll over local government debt

The People’s Bank of China (PBoC) has asked state-owned banks to roll over outstanding local government debt at lower interest rates, Reuters reports.

The central bank issued orders last week to major state lenders to extend terms, adjust repayment plans and reduce interest rates on outstanding loans to local government financing vehicles (LGFV), the article says.

Since local governments cannot borrow directly from banks, they set up LGFVs to raise funds for investing in infrastructure and