China’s bank lending declined less than expected in April as the central bank ramped up its monetary policy measures to support the economy that was hit by coronavirus pandemic.

Bank lending decreased to CNY 1.7 trillion from CNY 2.85 trillion in March, data from the People’s Bank of China showed Monday. Nonetheless, this was above economists’ forecast of CNY 1.3 trillion.

The broad measure of money supply, M2 grew at a faster pace of 11.1 percent on a yearly basis, following a 10.1 percent rise in March.

This was the fastest expansion in more than three years. M2 was expected to climb 10.3 percent in April.

Aggregate financing grew CNY3.09 trillion in April after rising CNY5.15 trillion a month ago.

In the quarterly monetary policy report released by the PBoC over the weekend, the bank vowed to take strong measures to combat the challenges posed by the coronavirus pandemic.

The central bank said it will maintain monetary policy flexible and keep liquidity at a reasonable level.

The report skipped the phrase “flood-like” stimulus, indicating that the bank will inject more funds into the financial system.

Iris Pang, an ING economist expects there will be more focused credit injections to SMEs, which should help employment. The easing is likely to be in the form of targeted RRR cuts or broad-based RRR cuts for all banks.


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