CHINESE banks extended less than 600 billion yuan (US$91 billion) in new loans in February, domestic media reported Friday, a surprisingly low figure that would help temper inflationary pressure.
China has steadily ratcheted up banks required reserves and ordered them to lend less in an effort to slow the money growth that has kept inflation running near its fastest in more than two years.
China Securities Journal quoted industry sources who said that new lending last month was less than 600 billion yuan. The median forecast of analysts polled by Reuters forecast was for 650 billion yuan.
It would be the second consecutive month that bank lending fell short of market expectations, suggesting that the government is gaining traction in its campaign to rein in credit growth.
A lending slowdown would show that higher reserve requirements had produced a better-than-expected effect, the newspaper said.
A source told reporters last week that Liu Mingkang, head of the China Banking Regulatory Commission, said lending had been excessively fast over the past two years, posing serious risks to the economy.
Domestic media reported earlier last week that China s top four banks would cap their combined new loans for the full year at 2.85 trillion yuan.
Because these banks usually account for roughly 40 percent of total loans, this implies that China could be on track for about 7 trillion yuan in new loans this year.
Economists and investors generally expect that new yuan loans in 2011 will be in the 7.0-7.5 trillion yuan range, although the government has not yet announced a loan target as in previous years.
(SD-Agencies)
