BEIJING, Aug 7 (Reuters) – China’s new bank loan issuance likely rose 45 billion yuan ($6.67 billion) in July, plunging from 1.61 trillion yuan in June, a Reuters poll of 20 economists showed on Friday, hurt by weak credit demand and after June’s quarter-end front loading.
The People’s Bank of China (PBOC) is expected to publish loans and money supply data between August 10 and 15. In July last year, China’s bank lending unexpectedly shrank by 50 billion yuan.
• “Credit demand of the private sector could stay subdued, and household could resume deleveraging in July,” Citi Research said in a note on Tuesday.
• “A rebound in credit demand looks distant as bills rate stayed close to 0.5% throughout the month,” the note said.
• At a meeting held on August 1, the PBOC pledged to adjust monetary policy tools in a timely manner, keep liquidity ample and guide financial institutions to enhance the balance of credit supply.
• Broader M2 money supply was expected to have grown 7.9% last month from a year earlier, slightly slower than the 8% recorded in June, the poll showed.
• Outstanding yuan loans were estimated to have grown 5.3% in July year-on-year, versus 5.2% growth in June.
• Total social financing – a broad measure of credit and liquidity – likely came in at 1.2 trillion yuan in July from 3.36 trillion yuan the previous month. It was up about 3.4% from last July’s 1.16 trillion yuan.
• Moody’s Ratings, in a July 31 commentary, said China’s credit conditions will remain stable in the second half of the year as fiscal and monetary support, strong exports, and technological advances offset weak domestic demand, but noting that medium-term growth depends on addressing structural weaknesses.
• The ratings agency said policy-directed lending to strategic sectors would likely offset subdued private borrowing and bank credit will remain the primary channel of supply over the next 12-18 months.
($1 = 6.7467 Chinese yuan renminbi)
(Reporting by Shi Bu and Kevin Yao；Polling by Susobhan Sarkar in Bengaluru and Jing Wang in ShanghaiEditing by Shri Navaratnam)