China’s new bank loans are expected to have rebounded in March from a sharp drop the previous month, a Reuters poll showed, as policymakers continue to urge lenders to help cash-strapped companies hit hard by the coronavirus crisis.
Chinese banks are estimated to have issued RMB 1.80 trillion ($254.70 billion) in net new RMB loans last month, nearly doubled from RMB 905.7 billion in February and higher than RMB 1.69 trillion a year earlier, according to the median estimate in a Reuters survey of 31 economists.
After a record growth in credit in January, new lending dropped sharply in February, which analysts attributed to seasonal factors. But if the March reading meets forecasts, total bank lending in the first quarter of this year would reach an all-time high of RMB 6.05 trillion, reflecting a stepped up easing by the central bank to support the world’s second-biggest economy.
On Friday, the central bank cut the amount of cash that small banks must hold as reserves, releasing around RMB 400 billion in liquidity to shore up the economy. The latest RRR cut, effective as of April 15 and May 15, would be the third so far this year and the 10th since early 2018.