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New loans halve in February

CHINA'S new loans fell in February as the government moved to limit lending growth to avoid overheating in the economy.

Banks in China extended 700.1 billion yuan (US$103 billion) of yuan-backed loans last month, half of January's 1.39 trillion yuan, the People's Bank of China said on its Website today.

Growth of M2, the broadest measure of money supply including cash and deposits, retreated to 25.5 percent from January's 26 percent.

"February monetary data shows further tightening, broadly as expected," said Alaistair Chan, associate economist at Moody's

"It suggests that the government has a better grip on commercial banks now and will guide lending lower as the year progresses."

Fewer loans in February coincided with the week-long Lunar New Year holiday.

China seeks a delicate balance between growth of 8 percent and inflation of within 3 percent this year.


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