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China boosts loan growth to jump-start economy

China’s banks extended RMB640.5 billion (US$101.51 billion) in new loans in December, up from RMB562.2 billion in November, as regulators began easing monetary policy to cushion the impact of the global economic slowdown, Reuters reported. Annual growth in M2, the broadest measure of money supply, accelerated to 13.6% in December from 12.7% growth in November, according to data released from the People’s Bank of China on Sunday. The surge in both figures exceeded analyst expectations, most of whom had forecast around RMB600 billion in new loans and annual M2 growth of 12.7% in December. Chinese policymakers have not yet declared an outright easing in monetary policy, instead stressing the need to “fine tune” policy. But the stronger-than-expected figures in December suggest that policymakers are on track to unveil more pro-growth steps in the coming months. The central bank did not release foreign exchange reserve figures along with money supply and lending data, contrary to its usual practice.

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