NEW bank loans in China rose to a three-month high in June as policymakers sought to keep ample funds in the financial system to support the slowing economy amid rising trade pressure.

Chinese banks extended 1.66 trillion yuan (US$241.47 billion) in net new yuan loans in June, up from 1.18 trillion yuan in May but less than expected, according to data released by the People’s Bank of China on Friday.

The figure was also lower than the tally in June 2018.

Analysts polled previously had predicted new loans would rise to a five-month high of 1.7 trillion yuan. Lending typically picks up in June from May.

“The pickup in lending has been modest relative to previous loosening cycles and is unlikely to prevent economic growth from slowing further in the coming quarters,” Capital Economics said in a note.

Household loans, mostly mortgages, rose to 761.7 billion yuan from 662.5 billion yuan in May, while corporate loans rose to 910.5 billion yuan from 522.4 billion yuan.

Broad M2 money supply rose 8.5 percent in June from a year earlier, the same pace as May. Analysts had expected an 8.6 percent rise.

Outstanding yuan loans rose 13 percent year on year, well below an expected 13.4 percent and down from 13.4 percent in May.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, quickened to 10.9 percent in June from a year earlier from 10.6 percent in May.

In June, TSF rose 61 percent to 2.26 trillion yuan from 1.4 trillion yuan in May. Analysts polled previously had expected 1.95 trillion yuan.

With the economy slow to respond to earlier growth measures, some analysts believe the People’s Bank of China could cut its benchmark policy rate for the first time in four years if the U.S. Federal Reserve delivers a widely expected cut in late July.(SD-Agencies)