China cuts rate on policy-bank lending facility

The People’s Bank of China said on September 29, 2026 that it would make collateral-backed funding for policy banks cheaper and available for a wider range of projects. It raised the refinancing quota for technology innovation and equipment upgrades by 200 billion yuan, from 1.2 trillion yuan to 1.4 trillion yuan, while lifting the share of eligible bank lending covered by the facility from 60 percent to 100 percent.

The decision matters to Hungarian and European suppliers because changes in Chinese investment demand can reach them through industrial orders, commodity prices and foreign-exchange markets. The quota is not an order guarantee: the impact will depend on how much new credit banks and companies actually use. Our previous market close describes the wider financial backdrop, while a separate briefing covers the European Central Bank’s collateral changes.

The refinancing and rediscount quota for agriculture and small firms increased by 500 billion yuan, from 4.35 trillion yuan to 4.85 trillion yuan. Within that total, the portion reserved for private enterprises rose by 300 billion yuan, from 1.0 trillion yuan to 1.3 trillion yuan. The next meaningful evidence will be actual bank disbursements and how quickly the additional funding reaches investment projects.