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QINGDAO TODAY
在线翻译:
szdaily -> Business -> 
New loans seen lower but hitting record
    2019-01-10  08:53    Shenzhen Daily

NEW bank loans in China likely fell in December after a rebound the previous month, a recent poll showed, but lending for all of 2018 still set a fresh record as the central bank works to boost credit to support the slowing economy.

Chinese banks were expected to have issued 800 billion yuan (US$116.79 billion) in net new yuan loans in December, much lower than the 1.25 trillion yuan extended in November, according to the survey of 33 economists.

However, some analysts believe the December slowdown may reflect seasonal factors as banks usually lend less towards the year-end due to tight loan quotas and capital charges.

For the year as a whole, China’s loan growth looks more solid, though the trend has also been influenced by a regulatory crackdown on shadow lending.

If December data in the coming week is in line with forecasts, total new bank lending in China in 2018 could hit 15.89 trillion yuan (US$2.32 trillion), up 17.4 percent from the previous record of 13.53 trillion yuan in 2017.

Analysts say faster credit expansion will be key to stabilizing China’s economy this year.

Several key credit gauges in China are at record lows, and analysts say it will take at least a few quarters for the latest policy easing measures to turn the trend around.

Broad M2 money supply growth in December was seen at 8.1 percent, only marginally up from an all-time low in the previous month.

Annual outstanding yuan loan growth was expected to have inched up to 13.2 percent for December.

China’s total social financing (TSF), a broad measure of credit and liquidity in the economy, is estimated to have dropped to 1.2 trillion yuan last month after climbing to 1.52 trillion yuan in November.

Analysts say China will have to keep up a steady stream of stimulus to steady the economy. Further cuts in the RRR are widely expected this year along with tax cuts and other measures to reduce strains on corporate balance sheets.

“After this cut, we expect a total of 150bp RRR cuts for the rest of this year, accompanied by more liquidity injections through the medium-term lending facility (MLF) or targeted MLF (TMLF),” analysts at Nomura said in a note.

The Bank of Communications predicted this week that banks could make small cuts in home mortgage rates in some cities this year to spur the cooling property sector.(SD-Agencies)

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