June 12, 2018 / 9:11 AM / a year ago

China May new loans fall to 1.15 trln yuan, below forecasts

BEIJING, June 12 (Reuters) - Chinese banks extended 1.15 trillion yuan ($179.58 billion) in net new yuan loans in May, below analysts’ expectations.

Analysts polled by Reuters had predicted new yuan loans of 1.2 trillion yuan, up slightly from April’s 1.18 trillion yuan.

Broad M2 money supply grew 8.3 percent in May from a year earlier, central bank data showed on Tuesday, missing forecasts for an expansion of 8.5 percent and compared with 8.3 percent in April.

Outstanding yuan loans grew 12.6 percent from a year earlier, slower than an expected 12.7 percent rise and compared with a rise of 12.7 percent in April.

China’s banks extended a record 13.53 trillion yuan in new loans last year, up 7 percent from 2016, despite a government drive to reduce risks in the financial system from a rapid build-up in debt.

The People’s Bank of China’s surprising cut in reserve requirement ratios (RRR) on April 17 and fears of a trade war with the United States have fanned market expectations of looser policy to support the economy.

But the central bank’s recent net liquidity injection via its 1-year medium-term lending facility (MLF) has prompted analysts to speculate about a delay in China’s next possible RRR cut. ($1 = 6.4038 Chinese yuan) (Reporting by Kevin Yao and Cheng Fang; Editing by Sam Holmes)

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