Bank lending lower than expected
Print Edition
CHINESE banks lent less than expected in December but long-term loans rose and annual lending hit a record high, marking a possible rise in financial support for economic growth.
Meanwhile, China’s foreign exchange reserves posted the smallest annual growth in over a decade as the yuan depreciated, the People’s Bank of China said in a statement yesterday.
New yuan loans totaled 697.3 billion yuan (US$112.7 billion) in December, below market hopes for 852.7 billion yuan according to a Reuters poll.
But the figure was still 214.9 billion yuan higher than December 2013, while middle and long-term loans, seen as most helpful for economic growth, amounted to nearly all of the new yuan loans extended last month, according to the central bank’s data.
That put new yuan loans for last year at a record 9.79 trillion yuan, up 890 billion yuan from 2013.
Liu Dongliang, a senior analyst with China Merchants Bank, said the increase in long-term loans is a positive signal for the economy.
Total social financing, the broadest measure of credit supply that includes loans, bank acceptance bills, corporate bonds and equity financing, rose to 1.69 trillion yuan in December from 1.15 trillion yuan in November.
That put total social financing at 16.46 trillion yuan for last year against 17.29 trillion yuan in 2013.
The record-high new lending was an indication the real economy has been relatively stable and active, said Sheng Songcheng, the head of the PBOC’s surveys and statistics department.
Economists said the relatively low inflation rate in China has given policy-makers enough room to ease monetary policies this year to support growth.
Zhu Haibin, chief China economist of JPMorgan, said he expects one interest rate cut in the first quarter of this year and two reserve requirement ratio cuts for banks in the first half.
The PBOC yesterday also said its foreign exchange reserves fell by US$48 billion in the fourth quarter to US$3.84 trillion at the end of December.
Last year saw the smallest annual rise of US$20 billion in foreign exchange reserves since 2001 even as the trade surplus hit a historical high of US$382 billion in 2014.
The yuan weakened 0.36 percent against the greenback last year, the first annual depreciation since the yuan-US dollar peg was removed in 2005.
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