Chinese banks extend the most in 6 months
Print Edition
CHINESE banks lent the most in six months in June and the country’s money supply accelerated after the government boosted measures to spur the economy.
The banks extended 1.28 trillion yuan (US$206 billion) in new loans last month, higher than the 1.08 trillion yuan in June last year and was the highest monthly lending since January, the People’s Bank of China said yesterday.
The loans extended also beat economists’ expectations for 1.05 trillion yuan, according to a Reuters poll.
M2, the broad measure of money supply, grew 11.8 percent year on year by the end of June, 1 percentage point faster than the growth last month, the central bank said.
Sheng Songcheng, head of the PBOC’s statistics department, yesterday attributed the faster money supply to four cuts in interest rates and three reductions in the bank reserve requirement ratio the central bank made in the first half of this year.
He said the PBOC will keep a prudent stance while continuing to fine-tune its policies.
Economists said the larger-than-expected lending indicated that the monetary stimulus measures are taking effect, but they are uncertain whether the reading marks the start of a long-term recovery.
“The government is devoted to guarantee bank lending, but the structure of credit showed that the proportion of long-term corporate loans declined, indicating weak investment sentiment from companies,” China Merchants Securities wrote in a note.
“Whether the economy could bottom out depends heavily on government investment, and we expect the monetary policies to remain accommodating amid cool inflation.”
New yuan loans in the first half were 6.56 trillion yuan, up 537.1 billion yuan from the same period of last year.
But total social financing, the broadest measure of credit supply that includes loans, bank acceptance bills, corporate bonds and equity financing, fell to 8.81 trillion yuan in the first half, down 1.47 trillion yuan from the same period of last year.
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