Bank credit in April stumbles

Source: Xinhua  |   2009-5-12  |     NEWSPAPER EDITION

CHINA'S bank credit fell considerably last month after staying above 1 trillion yuan for three straight months, with yuan-denominated new loans standing at 591.8 billion yuan (US$86.65 billion), the People's Bank of China said yesterday.

It raises outstanding loans in finance institutions by 29.72 percent to 35.55 trillion yuan by the end of last month.

The slower loan rise last month than in the first quarter was largely in line with market forecasts.

The country has pumped 4.58 trillion yuan of new loans into the economy in the first quarter to stimulate economic growth. The figure is already nearing 5 trillion yuan of new loans targeted for the whole year. In March alone, new loans jumped by a record 1.89 trillion yuan.

Yuan deposits rose by 1.03 trillion yuan last month, making the outstanding deposits 53.29 trillion yuan, a jump of 26.21 percent.

In the first-quarter monetary policy report released earlier this month, the central bank said it would continue to urge financial institutions to extend new loans, despite the earlier surge.

Ding Zhijie, deputy director of the Finance Institute of the University of International Business and Economics, estimated loan increases would further slow in the second quarter but the liquidity would remain abundant.

In the coming months, new bank loans should keep growing by 400 to 500 billion yuan per month, estimated Liu Yuhui, an economist with Chinese Academy of Social Sciences.