Latest News:  
Beijing   Thundershower/Overcast    28 / 22 ℃  City Forecast

Home>>China Business

Bank lending surges 45 percent in June

By Wang Xinyuan (Global Times)

08:41, July 13, 2012

China's total bank lending reached 919.8 billion yuan ($144 billion) in June, central bank data showed Thursday, a three-month high following the government's recent easing of monetary policy to reverse the economic slowdown. But economists said the moves may lead to a rebound in inflation later this year or early next year.

Bank lending in June, up 45.1 percent from a year earlier, is higher than market expectations of about 880 billion yuan, Zhang Zhiwei, chief China economist at Nomura Securities, told the Global Times.

"This confirms the policy easing is indeed on its way, reinforcing our view that growth will bottom out in the second quarter and rebound in the second half of this year," he said.

The People's Bank of China (PBC) cut the benchmark interest rates for the second time on July 5 in less than a month, making loans more affordable to businesses, in the hope to bolster the world's second largest economy.

The strong lending contributed to a faster growth of money supply, which accelerated in June to 13.6 percent compared with the same period last year, from a 13.2 percent year-on-year growth in May, according to the central bank.

"We expect new loans to remain at a high level in the coming months," Zhang said, adding that it may add inflationary pressure in the fourth quarter or early next year. He forecast that there will be no more interest rate cuts this year.

China's consumer price index, a major indicator of inflation, rose to 2.2 percent in June from a year earlier, slowing down from May's 3 percent rise, according to the National Bureau of Statistics. The relatively low growth of prices temporarily left more room for easing monetary policy.

Zhang estimated that there will be more cuts in the reserve requirement ratio (RRR) so that the banks can raise credit volume.

Yuan deposits also surged in June to 2.86 trillion yuan, up 17.4 percent year-on-year, according to data from the central bank.

"It also confirms our view that RRR cuts are necessary, given that a surge of deposits implies obligation to set aside more funds with the PBC under the reserve requirements," Dariusz Kowalczyk, senior economist and strategist with Credit Agricole CIB in Hong Kong, told the Global Times in an e-mail Thursday.

Email|Print|Comments(Editor:李倩、厉振羽)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Jinan MAC conducts live-ammunition firing training

  2. Unspoken rule to steep abalones in formalin

  3. Experiencing unique Taoist culture in Wudang

  4. Ten fruits that help moisture skin

  5. Investigator: Arafat died of unknown poison

  6. Companies have home thoughts from abroad

Most Popular

Opinions

  1. Naval exercises routine, not warning to Japan
  2. Hanoi will feel pain for helping US return
  3. Cooperation keeps China-Africa ties strong
  4. China won't yield to Japan's moves over disputes
  5. Sea spat can draw mainland and Taiwan closer
  6. New regulations a chance to build clean govt
  7. Negotiations on COC in S. China Sea favor peace
  8. Hanoi will feel pain for helping US return
  9. Telecoms industry stifled by capital prohibition
  10. Socialist market economy turning point for China

What's happening in China

Fake Viagra found in Nanjing

  1. Panhandlers are not a terrible sight in cities
  2. An online cover-up for classic art
  3. Smoking habit may cripple China social security
  4. Brand of instant noodles too acidic
  5. Foreign man stabbed to death in Beijing

China Features

  1. Why is TCM worth of commendation?
  2. Arabians pay heavy price for Arab Spring
  3. Master of pasted-paper sculpture
  4. China, US hold mixed attitudes toward each other
  5. China does not lack capital: CSRC Chair

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai