New bank loans in China tumble
BEIJING: New bank lending in China tumbled in April from the previous month as the COVID-19 pandemic jolted the economy and weakened credit demand, central bank data showed on Friday, ater it pledged to step up support to ward off a sharper slowdown.
Chinese banks extended 645.4 billion yuan ($95.14 billion) in new yuan loans in April, down about 80 per cent from March and falling short of analyst expectations, according to the People’s Bank of China data.
Analysts polled by Reuters had predicted new yuan loans would fall to 1.52 trillion yuan in April from 3.13 trillion yuan the previous month and against 1.47 trillion yuan a year earlier.
“Lending was much weaker than expected last monthaslockdownsweighedoncreditdemand.this should nudge the PBOC to announce further easing measures soon,” Capital Economics said in a note.
“But the central bank continues to signal a relatively restrained approach.”
The central said the sharp slowdown in April new loans reflected the impact of the COVID on the real economy.
“Enterprises,especiallysmall,medium-sizedand micro enterprises, had more operating difficulties, and demand for effective financing decreased significantly,” it said.
Full or partial lockdowns to stop the spread of COVID in dozens of Chinese cities, including a citywide shutdown in the commercial hub of Shanghai, have hit the economy hard.
To cushion a sharp slowdown in economic growth, the central bank cut the amount of cash that banks must hold as reserves from April 25, and more modest easing steps are expected.
The central bank said on Monday it would step up support for the slowing economy, while closely watching domestic inflation and monitoring policy adjustments by developed economies.
Broad M2 money supply grew 10.5 per cent from a year earlier, central bank data showed, above estimates of 9.9 per cent forecast in the Reuters poll. M2 grew 9.7 per cent in March from a year ago.