China's PSL loans fall but housing support seen in place
Analysts say the drop does not signal a policy shift from supporting the housing market
CHINA’S central bank said on Monday (Jun 3) its loans via the pledged supplementary lending facility (PSL) fell by 75 billion yuan (S$13.96 billion) in May, but analysts said the drop did not signal a policy shift from supporting the housing market.
The decline, which began in March, was likely driven by maturing loans used for a shantytown renovation program several years ago, analysts said.
China’s PSL programme, begun in 2014, is designed to provide support during a property downturn by funding urban redevelopment, helping push up prices in the process.
Outstanding PSL loans stood at 2.95 trillion yuan at the end of May, compared with 3.03 trillion yuan at end-April, the People’s Bank of China (PBOC) said in a statement.
“In May, China Development Bank, Export-Import Bank of China, and Agricultural Development Bank of China repaid a net pledged supplementary loans of 75 billion yuan,” it said.
The central bank made 500 billion yuan in PSL loans during December-January to these banks to fund urban village renovation, public housing construction and emergency public facilities, to support its property sector and aid the economy.
PSL loans unexpectedly fell by 343.1 billion yuan in April, the biggest monthly drop since the facility was launched in 2014, and 32.2 billion yuan in March, earlier central bank data showed.
In May, China unveiled “historic” steps to stabilise the property sector, including a 300 billion yuan relending facility to fund state firms’ purchases of completed unsold apartments. REUTERS
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