Chinese Banks Ramp Up Lending in June
Chinese banks ramped up lending in June, heeding the government’s call to restore economic activity and help struggling small businesses.
New bank loans stood at 1.81 trillion yuan ($258.79 billion) in June, up from CNY1.48 trillion in May, data from the People’s Bank of China showed.
The new lending was on par with the CNY1.8 trillion projection made by 15 economists polled earlier by The Wall Street Journal.
Total social financing, an aggregated credit that includes non-bank lending, stood at CNY3.43 trillion in June, up from CNY3.19 trillion a month earlier.
China’s central bank has unleashed billions of dollars of liquidity into the financial system to encourage more lending. It also cut benchmark loan rates to lower businesses’ financing costs.
M2, the broadest measurement of money supply, rose 11.1% on year in June, matching the pace in May and economists’ expectations.
Monetary easing, together with more government spending and other stimulus measures, is expected to lift the Chinese economy out of an on-year contraction recorded in the first quarter.
Economists polled expected the world’s second largest economy to grow 2.6% on year in the second quarter, compared with a 6.8% contraction in the first quarter.
Source: Dow Jones