China State Council: Will exempt VAT for small businesses in Hubei from March to end-May

China's State Council on Tuesday said that they encourage commercial banks to step up lending to small firms and push lending rates significantly lower as well as delaying interest payment for eligible firms until June 30, as reported by China's state television. 

"Will increase yuan re-lending and re-discount quota by 500 billion yuan to support small and medium banks," the Council added. "Will exempt VAT for small businesses in the Hubei province from March to end of May."

Market reaction

Although it's difficult to say if these remarks had a noticeable impact on market sentiment, the 10-year US Treasury bond yield erased a large portion of the earlier losses in the last hour and was last down 0.75% on the day.