China’s new bank loans are expected to surge to a record high in January on a seasonal boost, a Reuters poll showed, while credit growth may be constrained by some marginal tightening of monetary policy as the central bank focuses on preventing risks.
Chinese banks are estimated to have issued RMB 3.5 trillion ($542.06 billion) in net new RMB loans last month, up from RMB 1.26 trillion in December, according to the median estimate in a Reuters survey of 27 economists. The lending tally would be highest based on Reuters records, topping the RMB 3.34 trillion seen in January 2020.
Market rates started rising recently as the People’s Bank of China (PBOC) refrained from making its usual liquidity injections to meet high demand for cash ahead of the Lunar New Year holidays, leading to increasing concerns about liquidity tightening sooner than expected.
Monetary policy will continue to prop up the economy, but at the same time the central bank will watch for risks, PBOC governor Yi Gang said last month.