China February new yuan loans well above forecast

[BEIJING] Chinese banks extended 1.02 trillion yuan (US$162.87 billion) worth of new loans in February, well above market expectations, while growth in broad money supply quickened, central bank data showed on Thursday.

Economists polled by Reuters had expected new local-currency loans to fall to 750 billion yuan in February from 1.47 trillion yuan in January, which marked a lending surge not seen since mid-2009.

Broad M2 money supply (M2) in February rose 12.5 per cent from a year ago, beating expectations of 11 per cent and quickening from January's 10.8 per cent, which was the weakest since records started in 1998.

Outstanding loan growth was 14.3 per cent in February. Analysts polled by Reuters had expected outstanding loans to grow by 13.8 per cent, versus the previous month's 13.9 per cent.

The central bank also said that total social financing, a broader measure of overall liquidity in the economy, was 1.35 trillion yuan in February, versus 2.05 trillion yuan in January.

The government has set an economic growth target of around 7 per cent for this year, the slowest expansion in a quarter of a century and down from 7.4 per cent in 2014, but analysts believe more policy support is needed to avert the risk of a deeper downturn.

REUTERS