June 26, 2022


China’s new bank lending from October is expected to fall compared to the prior month. Bu the yuan loans are likely to be higher than a year earlier according to a Reuters poll.

According to survey of 26 economists conducted by Reuters, Chinese banks are estimated to have issued 800 billion yuan ($125.04 billion) in net new yuan loans last month, down from 1.66 trillion yuan in September.

The poll also showed annual outstanding yuan loans were expected to grow by 11.9% for October. While broad M2 money supply growth in the same month was recorded at 8.3%.

The amount would be higher than 689.8 billion yuan issued in the same month from a year earlier.

People’s Bank of China (PBOC) Governor Yi Gang last month mentioned that the growth of the country’s money supply and total social financing was largely in line with nominal GDP growth, and liquidity is ample.

According to policy sources and analysts, the central bank in order to boost the economy will likely move cautiously on loosening monetary policy, as slowing economic growth and soaring factory inflation fuel concerns over the recession.

In some cities, a few Chinese banks have increased the disbursement of home loans, however, no wave of new credit is being unleashed just yet over heavy regulatory push to deleverage the sector.

Earlier on Monday, the central bank of China had announced that in order to support the country’s long-term carbon-neutrality goals, it will provide financial institutions with low-cost loans to help firms cut down on carbon emissions.

According to Goldman Sachs analysts, they have estimated the central bank over the coming years to provide around 1.2 trillion yuan in funding support.

The Chinese finance ministry data has shown local governments of the country to have issued a net 2.37 trillion yuan in special bonds in the first nine months. While the government will also strive for early issuance of 2022 special local government bonds.

In October, total social financing (TSF) is expected to fall to 1.6 trillion yuan from 2.9 trillion yuan in the prior month.