China's June bank lending quickens, beating expectations

[BEIJING] China's banks made 1.27 trillion yuan (S$278.37 billion) worth of new loans in June, according to Reuters calculations based on fresh central bank data, handily beating market expectations, while broad money supply growth quickened last month.

The central bank said the broad M2 money supply (M2) grew at 11.8 per cent, beating forecasts.

Outstanding yuan loans grew at 13.4 percent by month-end, the bank said.

Economists polled by Reuters had expected new local-currency loans of 1.05 trillion yuan in June, compared with 900.8 billion yuan in May, a rise of 14 percent, and predicted the money supply would rise by 11 percent.

The central bank did not issue June new loans data at the same time as the other credit numbers.

Total social financing (TSF), a broader measure of overall liquidity in the economy, was 1.86 trillion yuan in June, compared with 1.22 trillion yuan in May.

Meanwhile, China's foreign exchange reserves, the world's largest, stood at US$3.69 trillion at the end of June, compared with US$3.73 trillion at the end of March, the central bank said. The total has declined for four consecutive quarters.

In order to support the economy, China's central bank cut its lending rates for the fourth time in seven months in June, and lowered the amount of cash that some banks must keep as reserves.

REUTERS