UNITED STATES (OBSERVATORY NEWS) — China is cleaning and quarantining used banknotes with the stated aim of limiting the spread of the coronavirus, the central bank announced on Saturday, while reaffirming its support for businesses in difficulty due to the epidemic.
Banks use ultraviolet rays or high temperatures to disinfect banknotes, before sealing them and isolating them for seven or fourteen days, said Fan Yifei, vice governor of the Chinese Central Bank (PBOC).
After this period of “quarantine”, the duration of which depends on the severity of the coronavirus epidemic in the region concerned, the banknotes can be put back into circulation, he said at a press conference.
“We must preserve the safety and health of cash users,” insisted Fan, adding that transfers of tickets between provinces had been suspended.
The PBOC seems to respond to an increased reluctance of the Chinese to use cash for fear of contamination. Even if mobile payments have been ubiquitous for years in the country, most Chinese consumers use their smartphones to pay for their daily purchases.
The central bank also carried out before the Lunar New Year holidays at the end of January “an emergency issue” of new banknotes in the amount of 4 billion yuan (530 million euros) for Hubei ( center), province at the epicenter of the epidemic.
Faced with the epidemic of viral pneumonia, which has killed more than 1,500 and contaminated more than 66,000 people in China, disinfection operations have multiplied in public places and residents are encouraged to limit contact between them.
According to the World Health Organization (WHO), Covid-19 pneumonia is mainly transmitted by respiratory route (for example in saliva droplets) and by physical contact, but also by touching contaminated surfaces.
While some analysts expect possible monetary easing to revive an economy crippled by the epidemic, Fan Yifei simply said on Saturday that the institution would pursue a “prudent” monetary policy.
Without excluding margins of maneuver: the ratio of bad debts in the balance sheet of banks “remains still relatively low”, insisted Mr. Fan.
In this context, the CBRC, the Chinese policeman in the banking sector, calls on commercial banks to increase their lending to businesses while keeping the cost of credit “at a reasonable level”, insisted its vice president Liang Tao at the same press conference.
This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.
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