China Credit Growth Beats Estimates, Spurs Lending
China’s broadest measure of new credit rose last month more than economists forecast, suggesting monetary easing is spurring demand for loans, according to a Bloomberg article.
Aggregate financing was 215.5 billion in February, the People’s Bank of China said in Beijing, above economists’ median estimate of $159.6 billion, Bloombergreported.
With two interest-rate cuts and one reduction to the percentage of reserves banks have to set aside in the past four months, the central bank is seeking to cushion China’s slowdown. Industrial output, investment and retail sales growth missed analysts’ estimates in January and February, suggesting more stimulus is needed to boost the world’s second-largest economy, according to Bloomberg.
“We see continued pretty solid core bank lending but a further slowdown in shadow banking,” said Louis Kuijs, Royal Bank of Scotland Group Plc’s chief Greater China economist in Hong Kong. “Authorities are trying to push liquidity into the system, but in terms of real economic entities, demand for credit is not very strong.”
To read the entire Bloomberg article, click here.