China’s new yuan loans in January hit a record high

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  • New loans at 3.69 trillion yuan in January, up from 1.13 trillion yuan in December
  • Money supply growth in January at 9.2% yoy versus 9.0% in December
  • Jan TSF was 5.46 trillion yuan, up from 2.37 trillion yuan in December
  • Loans, money supply data due Feb 10-15

BEIJING, Feb 8 (Reuters) – China’s new yuan lending likely hit a record high in January and monetary growth is also expected to pick up as the central bank seeks to shore up slowing growth in the world’s second-biggest economy.

Chinese banks tend to frontload loans earlier in the year to attract higher quality customers and gain market share.

Banks are estimated to have net new yuan loans of 3.69 trillion yuan ($580.30 billion) last month, more than tripling from December’s 1.13 trillion yuan, the agency said mean estimate in the survey of 18 economists.

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That would surpass a monthly record of 3.58 trillion yuan in January 2021.

China’s economy has slowed over the past year and faces multiple headwinds as a real estate downturn hurts investment and the country’s efforts to curb local cases of the highly contagious Omicron variant weigh on consumption.

The central bank has cut bank reserve ratios (RRR) and benchmark lending rates, and further easing is expected. Continue reading

Authorities have slightly eased funding restrictions on developers and accelerated mortgage lending for homebuyers.

Annual outstanding yuan loans are expected to rise 11.6% in January, the same as in December, the survey showed. Broad M2 growth was 9.2% in January compared to 9.0% in December.

China has also ramped up infrastructure investment to cushion the economic slowdown, funded by faster issuance of special bonds by local governments.

China has spent 1.46 trillion yuan on local government special bonds under the 2022 advance quota to boost investment and support the economy.

Any acceleration in government bond issuance could help boost total social financing (TSF), a broad measure of credit and liquidity. TSF outstanding increased by 10.3% in December versus 10.1% in November.

In January, TSF is expected to rise to 5.46 trillion yuan from 2.37 trillion yuan in December.

($1 = 6.3588 Chinese renminbi yuan)

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Reporting by Judy Hua and Kevin Yao; Editing by Shailesh Kuber

Our standards: The Thomson Reuters Trust Principles.

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