(Yicai Global) June 2 -- China's central bank has introduced two new monetary policy tools that could unleash about CNY1 trillion (USD140.4 billion) in new loans for small and micro-sized enterprises that are struggling amid the Covid-19 pandemic.

The first of the two allows small firms to postpone their bank loan payments till the end of March 2021, the People's Bank of China announced yesterday evening. To this end, the PBOC will provide CNY40 billion (USD5.6 billion) in relending funds, which is expected to help banks extend loan principal by about CNY3.7 trillion (USD519.7 billion).

The second policy aims to encourage lenders to give more inclusive loans. The PBOC will use a CNY400 billion (USD56.2 billion) special relending quota to purchase 40 percent of small and micro-sized firms' unsecured loans with at least six-month maturities, made between March and the end of this year. This, particularly, should spark new loans worth about CNY1 trillion (USD140.4 billion).

Companies only need to maintain stable employment to be eligible for the policies, the PBOC added.

Editor: Emmi Laine