BEIJING: China’s bank lending rose in June and the broader money supply also increased, the central bank said Tuesday, as monetary easing measures to boost the world’s second-largest economy kicked in.
Domestic banks extended new loans of 1.27 trillion yuan ($204.5 billion), up from 900.8 billion yuan in May, the People’s Bank of China (PBoC) said in a statement.
Total social financing—a broader measure of credit in the economy—reached 1.86 trillion yuan last month, it said, up from 1.22 trillion yuan in May.
Social financing, also known as aggregate financing, exceeded the median forecast of 1.4 trillion yuan in a survey of economists by Bloomberg News.
China’s central bank has cut interest rates four times since November and also lowered the amount of cash banks must keep in reserve to help pump up slowing economic growth.
The increase in bank lending was “above market expectations due to recent monetary easing measures,” ANZ economist Liu Li-Gang wrote in an analysis of the figures.
China’s economy expanded 7.0 percent year-on-year in the first quarter, slumping to a post-global financial crisis low, despite Beijing taking policy steps to bolster growth.
Gross domestic product (GDP) expanded 7.4 percent in 2014, the slowest pace in 24 years, and the government has cut the annual growth target for 2015 to “approximately” 7 percent.
The government announces second-quarter GDP figures on Wednesday, with the median forecast in an Agence France-Presse poll of 14 economists predicting expansion of 6.9 percent in the period.
For all of 2015, the Agence France-Presse survey predicts growth at a median 7.0 percent, more optimistic than a forecast of 6.8 percent in a similar poll in April and in line with the government’s official target.
The PBoC also said that China’s foreign exchange reserves, the world’s largest, stood at $3.69 trillion at the end of the second quarter in June, down from $3.73 trillion at the end of the first three months of the year, marking the fourth straight quarterly decline.
The fall “was consistent with the strong” Chinese yuan in the second quarter, Liu wrote, citing US dollar sales by the central bank to keep the Chinese currency “stable at around 6.20 per dollar.”