China’s February Credit Expansion Beats Expectations
What’s new: China’s credit growth exceeded analysts’ expectations in February, a traditionally slow month because of the Lunar New Year holidays, reflecting stronger credit demand from corporations.
Financial institutions offered 1.36 trillion yuan ($209 billion) of new loans in the month, compared with 3.56 trillion yuan in January and 905.7 billion yuan in February last year, according to the People’s Bank of China. The median estimate in a Caixin survey of economists was 920 billion yuan.
Banks made 1.1 trillion yuan of medium and long-term loans to nonfinancial companies.
Aggregate financing in February was 1.71 trillion yuan, beating the average estimate of 895 billion yuan. That compares with 5.17 trillion yuan in January and 873.7 billion yuan in the same month last year.
More to know: Corporate borrowing was the main driver of February’s credit growth.
“The high credit growth reflects that the economy’s recovery momentum will continue,” said Ming Ming, head of fixed income research at Citic Securities.
Broad M2 money supply grew 10.1% in February, higher than the previous month’s pace of 9.4%.
The central bank wants to keep the growth of money supply and aggregate financing in line with the expansion of nominal gross domestic product, Deputy Governor Chen Yulu said in an interview during the annual National People’s Congress meeting.
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