Daily Management Review

China Creates Record In Extending New Loans


02/17/2016


The approaching Lunar New Year in China brings good tidings for the loan applicants as their quota was made broader.



China Creates Record In Extending New Loans
China exceeds the loan expectations for the month of January followed by a boost in “increased injections” that came from the Central Bank before the “Lunar New Year”.
 
As per the data banks set a record of “2.51trn yuan” as new loans that were given out in the month of January. The said figures beat all the estimates of analysts which were at “1.9trn yuan”, whereby the new loan figure for the previous month rests at “597.8bn yuan”.
 
The prices of properties recovered its loss and the increasing demand in the said market began to support the figures through mortgages. Furthermore, analysts also informed that in the beginning of the year the tendency of the banks usually lead to an increase in the lending scheme as they “issue fresh loan quotas”. However, the Capital Economics’ Julian Evans-Pritchard, a Chinese economist remarked:
“Nonetheless, the pick-up was much larger than anticipated. Stripping out the seasonal effects, growth in outstanding loans rose from 14.3% year-on-year in December to 15.3% year-on-year last month.”
 
The social financing figures for the month of December 2015 were at 1.82trn yuan, whereas the same received a boost and scaled upto “3.42trn yuan” in the month of January 2016. After nineteen months, the supply of broad “M2 money” touched the pinnacle at fourteen percent in the month of January as compared to its previous year’s respective figures, while the expectations were of “13.4%”.
 
The People’s Bank of China’s act of injecting cash into the banking system has given a new boost as the credit growth just took to wings. Consequently, the PBoC put in “1.53trn yuan via its standing lending, medium-term lending facility and pledged supplementary lending facility” in the start of February. In the words of Evans-Pritchard:
“Looking ahead, we expect credit growth to remain strong given that the PBoC has kept monetary conditions loose”.
“Indeed, contrary to what many have claimed, there is no evidence that the PBoC’s intervention to prop up the renminbi has resulted in tighter domestic liquidity conditions.”






References:
http://www.digitallook.com/
 







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