China's April new bank lending at 739.6 bln yuan
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Chinese banks extended 739.6 billion yuan (113.9 billion U.S. dollars) in local currency loans in April, a decrease of 20.8 billion yuan from a year earlier, the central bank said Wednesday.
By the end of April, the balance of outstanding yuan-denominated loans stood at 50.21 trillion yuan, up 17.5 percent from a year earlier, the People's Bank of China (PBOC) announced in a statement on its website.
The rise was 0.4 percentage points lower than that at the end of March and 4.5 percentage points lower than that at the end of April 2010.
China's broad money supply, which covers cash in circulation and all deposits, increased 15.3 percent year on year to 75.73 trillion yuan by the end of April. The rise was 1.3 percentage points lower than that in March and 6.2 percentage points lower than that in last April.
The narrow measure of money supply, cash in circulation plus current corporate deposits, climbed 12.9 percent from a year earlier to 26.68 trillion yuan. The increase was 18.4 percentage points lower than the same period last year.
The balance of outstanding yuan-denominated deposits rose 17.3 percent year on year to 75.62 trillion yuan by the end of April. The rise was 1.7 percentage points lower than that in March and 4.7 percentage points lower than that in the same period of last year.
However, even at a slower pace, the monetary supply was still growing fast on the back of a large base, injecting a large amount of liquidity into the market, said Lu Zhengwei, chief economist with the Shanghai-based Industrial Bank.
The bank lending figures were released alongside inflation data that shows that consumer prices that rose 5.3 percent in April from a year earlier, slightly down from the 5.4 percent for March, but still at a high level.
Analysts said that the 5.3 percent reading was higher than expected, especially given the whole year target of four percent, thus keeping the door open for more tightening steps.
The data indicated the cycle for interest rate and required reserve ratio (RRR) hiking was not over and there was possibility that the RRR would be raised again in May, Lu said.
He expects China's macroeconomic policy to remain tight for now and added, that compared with RRR hikes, raising the interest rate would bring about further tightening.
The central bank has raised interest rate four times since last October and ordered large financial institutions to lock up a record high of 20.5 percent of their deposits as reserve.
In its quarterly monetary policy report posted on its website last week, the central bank pledged to properly handle the relationship between controlling money supplies and improving structures, and to remove inflation's monetary conditions while meeting various financing demands.
The PBOC also said, to keep rising price in check, it will continue to strengthen liquidity management and make good use of various price and quantitative tools, such as open market operations, bank reserve requirement ratios and interest rates based upon market developments.
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