New credit rises more than expected
By Zhang Fengming |
May 12, 2010, Wednesday
|
Print Edition
Print Edition
CHINA'S new credit rose faster than expected in April as lenders increased mortgage and short loans with an improving credit structure to come, according to central bank data yesterday.
Banks in China extended 774 billion yuan (US$113 billion) in local-currency loans last month when compared with March's new credit of 511 billion yuan, the People's Bank of China said yesterday on its Website.
"Bank lending increased in April when compared with March but this does not mean a pickup in lending is underway," said Tine Olsen, a Moody's Economy.com economist, yesterday. "Total bank lending is still expected to gradually decline throughout the year as banks' lending quotas are filled."
The latest reserve requirement hike that took effect on Monday, the restrictions on second or third home loans and the open market operation are all expected to curb lending growth in coming months, she said.
New household loans came in at 326 billion yuan in April, up from March's 271 billion yuan. Banks also extended 326 billion yuan of medium-to-long term corporate loans last month, easing from March's 519 billion yuan.
April's new credit is more than the median market forecast of 585 billion yuan made by a Bloomberg News survey of 24 economists.
China's new credit issuance fell in February and March this year.
The growth of M2, the broadest measure of money supply, slowed to 21.5 percent in April from March's 22.5 percent, the central bank said.
China has targeted a money supply growth of 17 percent this year and new credit of 7.5 trillion yuan.
China's official monetary stance is still "appropriately loose" but tightening moves have already been rolled out to cool off the housing market.
"Looking forward, China's credit structure can further improve on a decline in real estate development loans due to a tighter home loan policy," said Lu Zhengwei, an Industrial Bank senior economist.
Banks in China issued a record 9.6 trillion yuan of new credit in 2009 amid a stimulus package against the global financial crisis.
Meanwhile, economists said they expect the yuan to begin appreciating again after a wording change was found in the central bank's first quarter monetary policy report released this week.
Banks in China extended 774 billion yuan (US$113 billion) in local-currency loans last month when compared with March's new credit of 511 billion yuan, the People's Bank of China said yesterday on its Website.
"Bank lending increased in April when compared with March but this does not mean a pickup in lending is underway," said Tine Olsen, a Moody's Economy.com economist, yesterday. "Total bank lending is still expected to gradually decline throughout the year as banks' lending quotas are filled."
The latest reserve requirement hike that took effect on Monday, the restrictions on second or third home loans and the open market operation are all expected to curb lending growth in coming months, she said.
New household loans came in at 326 billion yuan in April, up from March's 271 billion yuan. Banks also extended 326 billion yuan of medium-to-long term corporate loans last month, easing from March's 519 billion yuan.
April's new credit is more than the median market forecast of 585 billion yuan made by a Bloomberg News survey of 24 economists.
China's new credit issuance fell in February and March this year.
The growth of M2, the broadest measure of money supply, slowed to 21.5 percent in April from March's 22.5 percent, the central bank said.
China has targeted a money supply growth of 17 percent this year and new credit of 7.5 trillion yuan.
China's official monetary stance is still "appropriately loose" but tightening moves have already been rolled out to cool off the housing market.
"Looking forward, China's credit structure can further improve on a decline in real estate development loans due to a tighter home loan policy," said Lu Zhengwei, an Industrial Bank senior economist.
Banks in China issued a record 9.6 trillion yuan of new credit in 2009 amid a stimulus package against the global financial crisis.
Meanwhile, economists said they expect the yuan to begin appreciating again after a wording change was found in the central bank's first quarter monetary policy report released this week.
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