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HomeEconomySupported by policy, China's new bank loans increased more than expected in...

Supported by policy, China's new bank loans increased more than expected in June

(resubmitted to clarify update 2 in title)

By Qiaoyi Li and Kevin Yao

Beijing (Reuters) – China New Bank Loans rose more than expected month-on-month in June, helped by the central bank’s efforts to support the economy as the post-pandemic recovery fades.

Chinese banks extended the deadline by 3 months. 10 Trillion RMB ($45.45 100 million) new renminbi lending more than doubled in June from May, beating analysts’ forecasts, data from the People’s Bank of China showed on Tuesday.

Economists polled by Reuters had forecast new yuan lending would climb to 2. (*trillion yuan last month, up from 1.22 trillion yuan in May.

Guotai Junan Zhou Hao, an international economist, said: “Obviously, the market needs more time and information to assess the strong credit data at the end of the second quarter – although it looks similar to the data in the first quarter, the market will definitely interpret it cautiously.” .

“In our view, a measure of home sales across the country will provide new insight into the link between credit data and household sentiment.”

Household loans (mainly mortgage loans) increased from 855 700 million yuan in May to 2024 900 million yuan in June, while corporate loans to the central bank Data show that the balance of RMB last month soared from 855 800 million yuan in May to 2 34 trillion yuan.

After three years of COVID-19 restrictions, China has moved to boost demand as households and private firms save more and reduce borrowing and spending to repair their balance sheets. More stimulus expected Measures.

China’s central bank on Monday extended some of the policies in the November rescue plan until the end of 2024.

The world’s second largest economy The post-epidemic recovery is faltering. In June, producer prices fell at the fastest rate in seven years, and consumer prices teetered on the brink of deflation.

Premier Li Qiang spoke with economists last week The meeting promised to introduce a series of measures to introduce policy measures in a timely manner to stabilize growth and employment.

The central bank slightly lowered the benchmark lending rate 10 June basis points, the first such cut in months, to support the economy.

The central bank pledged to implement “precise and forceful” prudent policies to support the economy.

Broad M2 money supply rose

. Central bank data showed 3% year-on-year growth in June, higher than opinion polls The expected .2%. M2 year-on-year growth in May 05.6%.

More policy steps needed

Rmb loan balance to grow year-on-year .3%, the lowest in five months, year-on-year 10. An increase of 4% from the previous month. Analysis Division expects growth of .2%.

Total social financing (TSF) growth year-on-year in the economy Credit and A broad measure of liquidity slowed to 9.0% in June from 9.5% in May, the lowest level on record.

“The continued deceleration adds to headwinds for the economy in the second half,” analysts at Capital Economics said in a note.

“Further policy support may be on the horizon, but given weak demand, we doubt it will contribute much to a pick-up in credit growth,” analysts said, expecting further policy support to come. Policy support 10 bp rate cuts are coming soon.

TSF includes off-balance sheet financing outside the traditional bank lending system, such as initial public offerings, trust company loans, and bond sales.

In June, social financing scale jumped to 4. 10 trillion yuan from 1.34 trillion yuan in May to 1.36 trillion yuan. Analysts polled by Reuters had expected total social financing to be 3 trillion yuan in June.



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