China central bank pledges rapid, sustainable credit growth through 2024

THE People’s Bank of China said it will ensure credit grows rapidly and at a sustainable pace throughout 2024, in its latest effort to spur corporate borrowing and money supply expansion.

Aggregate financing, the widest measure of credit provided to the economy, rose 9.4 per cent year on year in November. That continued a streak of single-digit growth in 2023, compared with the double-digit expansion that was normal in previous years.

The central bank reiterated a pledge to push for lower borrowing costs and keep the yuan exchange rate basically stable, according to a statement on Friday (Jan 5) after a two-day annual work conference.

With expectations of rate cuts in the US this year lessening pressure on the yuan, China is expected to cut interest rates and banks’ required cash reserves moderately throughout 2024 to help an economy battered by a persistent property slump and weak consumer confidence.

The bank has signalled in recent weeks a greater focus on the structure of credit and guiding financial resources into areas seen as desirable, such as manufacturing and green sectors. It has also called for a smoother growth of credit to avoid drastic monthly volatility. BLOOMBERG