2011 new lending around 6.7t yuan: Report
Updated: 2011-07-06 09:19
Chinese banks are seen issuing 6.7 trillion yuan ($1.04 trillion) worth of new loans this year, a newspaper said on Wednesday, suggesting lending could slow markedly in 2011 as part of drive to tame inflation.
Drawing on its own calculations and without citing sources, the China Securities Journal said the pace of new bank lending could ease considerably from last year's 7.95 trillion yuan.
The pace of bank lending is a focal point in China's monetary policy as it is used by China to manage economic growth and inflation. The government tells banks how much they should lend by setting loan quotas.
Chinese banks likely lent 4 trillion yuan worth of new loans in the first six months of this year, after lending 3.5 trillion between January and May, the paper said.
Accordingly, total new lending for the year would hit around 6.7 trillion yuan if Chinese banks control their pace of lending according to a formula stipulated by the central bank, the paper said.
It said the formula calls for banks to lend 60 percent of annual loans in the first half of the year, and the remaining 40 percent in the second.
With inflation at 34-month highs and a lending spree by Chinese banks in 2009 feeding worries about a build-up of bad debt, China wants to temper bank lending this year.
Since October, it has increased interest rates four times and raised the reserve requirement ratio for banks six times, effectively ordering banks to lock a record 21.5 percent of deposits with the central bank.
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