CHINA’S new bank lending likely pulled back sharply in April from strong levels the previous month, but is still expected to be much higher than a year earlier as the lenders urges lenders to help keep coronavirus-hit companies afloat.

Chinese banks are estimated to have issued 1.40 trillion yuan (US$200.72 billion) in net new yuan loans last month, according to the median estimate in a survey of 27 economists.

That would be half the 2.85 trillion yuan extended in March, but 37 percent higher than 1.02 trillion yuan in credit a year earlier.

China has ramped up its credit push to counter its worst economic slowdown in decades. Bank lending jumped to a record 7.1 trillion yuan in the first quarter of this year.

While April lending levels have tended to moderate from March in past years, analysts expect policymakers will continue to roll out more monetary and fiscal stimulus in coming months until businesses and consumers get back on more solid footing.

The central bank has urged banks to offer cheap loans to firms hardest hit by the crisis, roll over existing loans and tolerate delays in repayments.

UBS said in a research note that it expects an additional 50 basis points of cuts in RRR and 10-20 basis points cuts in medium-term lending facility (MLF) rate.

Local governments issued 1.6 trillion yuan in bonds in the first quarter of this year, including 1.1 trillion yuan in special bonds.

China aims to complete issuance of another 1 trillion yuan local government special bonds by end-May, according to a cabinet meeting chaired by Premier Li Keqiang last week.

In April, TSF is expected to fall sharply to 2.65 trillion yuan from a record 5.15 trillion yuan in March.(SD-Agencies)