China Oct new bank loans fall less than expected, stagflation risk limits easing room

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BEIJING (Businesshala) – New bank loans in China fell sharply in October compared with the previous month, but not as badly as forecast by analysts who urged the central bank to cautiously ease monetary policy due to inflationary risks. expect.

FILE PHOTO: A man wearing a mask walks past the headquarters of the People’s Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 3, 2020. Businesshala / Jason Lee

Data released Wednesday by the People’s Bank of China showed banks extended 826.2 billion yuan ($129.27 billion) in new yuan loans in October, sharply down from 1.66 trillion yuan in September and 800 billion yuan. The yuan was better than falling until analysts polled by Businesshala. had expected.

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New loans were up from 689.8 billion yuan a year earlier.

Central Bank Governor Yi Gang said last month that the growth of China’s money supply and total social financing was largely in line with nominal GDP growth, and that liquidity was adequate.

Policy sources and analysts said the People’s Bank of China (PBOC) is likely to ease monetary policy to bolster the economy, as slowing economic growth and rising factory inflation fuel worries, policy sources said. and analysts said.

China’s factory gate inflation hit a 26-year high in October as coal prices rose amid a power crunch in the country’s industrial sector, further narrowing profit margins for producers and heightened inflation concerns.

Data from the central bank showed the broad M2 money supply grew 8.7% from a year earlier, up from an 8.3% forecast in a Businesshala poll. M2 rose 8.3% in September.

Outstanding yuan loans rose 11.9% in September compared to an increase of 11.9% a year ago. Analysts had expected growth of 11.9%.

Outstanding total social financing (TSF) growth, a broad measure of credit and liquidity in the economy, stood at 10.0% in October, unchanged from September.

TSF includes off-balance sheet forms of financing that exist outside the traditional bank lending system, such as initial public offerings, loans from trust companies, and bond sales.

In October, TSF fell to 1.59 trillion yuan from 2.9 trillion yuan in September. Analysts polled by Businesshala had expected an October TSF of 1.6 trillion yuan.

Reporting by Judy Hua and Kevin Yao; Editing by Simon Cameron-Moore

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