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Central bank plans preferential policies for disaster areas
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The People's Bank of China said preferential financial policies will soon come out to support reconstruction work for earthquake-ravaged areas in Sichuan Province.

The bank is now considering policies for mortgage loans, credit card repayments and any bad record that may be caused by the disaster, the Oriental Morning Post reported today.

The People's Bank of China is expected to announce the policies tomorrow or the day after, the report said.

The 8.0-magnitude earthquake hit Wenchuan County on May 12, killing 32,476 people as of 4 pm yesterday. Another 220,109 people were injured and authorities fear the death toll may rise to 50,000.

China has declared three days of national mourning for earthquake victims starting today and suspended the Olympic torch relay during the period.

The central bank has already decided to no longer raise the reserve ratio in six cities that were among the worst-damaged areas of Sichuan.

Chengdu, Deyang, Mianyang, Guangyuan, Ya'an and Aba Tibetan Minority Autonomous City will not have the reserve ratio increased tomorrow that will take effect across the rest of the country.

The reserve ratio -- the amount of money a bank must put in the central bank -- will rise 0.5 percentage points to 16.5 percent on yuan deposits from May 20, the People's Bank of China said on May 12, the same day of the earthquake.

The increase, the fourth so far this year, is in line with the government's tight monetary policy to curb inflation, Li Chao, the spokesman of the bank, said yesterday.

But given the reconstruction work that is necessary in Sichuan, the bank will make some exceptions and necessary policy changes will be made, Li added.

The central bank has loaned 5.5 billion yuan (US$785 million) to help commercial banks in disaster areas get through the difficulties.

The state treasury had dispatched relief funds totaling 8.982 billion yuan to Sichuan by 5pm yesterday, the report said.

(Shanghai Daily May 19, 2008)

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