China asked banks to rein in credit on bubble fears, FT reports

[LONDON] China's central bank asked lenders to rein in credit supply on concern the surge in loans is fueling asset bubbles, the Financial Times (FT) reported.

The People's Bank of China in February told banks to keep new loans in the first quarter roughly at the same level as last year, if not lower, the newspaper reported citing unidentified people with knowledge of the situation.

It is the latest indication policy makers' attention is returning to curbing financial risks, after stepping up monetary support earlier to cushion the economy through the pandemic.

Authorities have recently pared back liquidity injections and sounded the alarm over risks in the property sector and bubbles in global markets.

China's new loans rose by 16 per cent in the first two months while new home sales surged 133 per cent, according to the FT.