City skyline in China

China Money February 2024

China: Credit data disappoints in February

In February, Chinese banks distributed CNY 1450 billion in new yuan loans, down from January’s 4920 billion figure. While the slowdown was to be expected, as firms frontload loans at the start of the year, February’s reading undershot market expectations. Money supply rose 8.7% year on year in February (January: +8.7% yoy), also below market expectations. Meanwhile, the stock of total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—expanded 9.0% in the month (January: 9.5% yoy).

Regarding monetary policy, the Central Bank has left key interest rates unchanged over the last month, after cutting the reserve requirement ratio in early February. Our Consensus is for mild monetary easing by end-2024, though the scope for large rate cuts will likely be constrained by the need to protect banks’ profit margins.

On monetary policy, United Overseas Bank’s Ho Woei Chen said:

“We still expect the PBOC to moderately increase monetary policy support this year with the 1Y LPR likely falling to 3.20% by end-4Q24 while the 5Y LPR may stay on hold at 3.95% through the rest of 2024. PBOC Governor Pan Gongsheng also suggested room to cut banks’ reserve requirement ratio (RRR) further.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest