BEIJING — The outbreak of novel coronavirus illness (COVID-19) does have an impact on firms' ability to repay bonds but the overall effect on the market is not huge, a central bank official said.

The central bank expected bond default risks to decline overall, as there is sufficient liquidity in the bond market and the scale of bonds due for payment by private enterprises remains moderate, Peng Lifeng, an official with the People's Bank of China (PBOC), the central bank, told a news conference on Feb 24.

Those firms and industries adversely affected by the epidemic such as catering and tourism account for about 1 percent in terms of the newly added financing scale in the whole market, which won't push up the default risks if they encounter difficulties, Peng said.

The PBOC has rolled out preferential policies in loan risk classification for the enterprises impacted while issuing special reloans for them.

"China's financial system has shown strong resilience in dealing with risks," said Peng. "Investors believe the impact of the epidemic is temporary and won't change the country's sound economic fundamentals for the long-term trend of steady growth."