BEIJING (Reuters) – China’s new yuan loans are expected to rebound in March from a sharp drop in February, a Reuters poll showed, as the central bank keeps policy accommodative to support a nascent economic recovery.
Chinese banks are estimated to have issued 3.24 trillion yuan ($471.30 billion) in net new yuan loans last month, up sharply from 1.81 trillion yuan in February, according to the median estimate in the survey of 20 economists.
The expected new loans would be 3.5% higher than 3.13 trillion yuan issued in the same month a year earlier.
After record growth in credit in January, new lending dropped sharply in February. Still, if the March reading meets forecasts, total lending in the first quarter would reach a record high of 9.95 trillion yuan.
To spur growth, the central bank in March cut banks’ reserve requirement ratio (RRR) for the first time this year.
The central bank has pledged to keep money supply and total social financing growth generally in line with nominal economic growth this year.
Outstanding yuan loans were expected to grow by 11.7% in March from a year earlier, up from 11.6% in February, the poll showed. Broad M2 money supply growth in March was seen at 12.7%, down from 12.9% in February.
China has set the 2023 quota for local government special bond issuance at 3.8 trillion yuan, up from 3.65 trillion yuan last year.
Any acceleration in government bond issuance could help boost total social financing (TSF), a broad measure of credit and liquidity. Outstanding TSF was 9.9% higher at February-end than a year earlier, growing faster than the 9.4% annual rate seen at the end of January.
In March, TSF is expected to rise to 4.5 trillion yuan from 3.16 trillion yuan in February, the survey showed.
($1 = 6.8746 renminbi)
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