China’s bank lending increased more than expected in November, data from the People’s Bank of China showed Tuesday.
Banks extended CNY 1.39 trillion new loans in November versus CNY 661 billion in October. Lending was forecast to rise to CNY 1.2 trillion.
Bank lending usually increases in November after reduction in October due to seasonal factors.
Total social financing, a broad measure of credit and liquidity in the economy, climbed to CNY 1.75 trillion from around CNY 619 billion a month ago. This was also above the expectations of CNY 1.47 trillion.
Broad money supply M2 grew at a slower pace of 8.2 percent on year, following an 8.4 percent increase in October. Economists had forecast the rate to remain unchanged at 8.4 percent.
The underwhelming impact of recent monetary easing on credit growth strengthens the case for the PBoC to do more, Julian Evans-Pritchard and Martin Lynge Rasmussen, economists at Capital Economics, said.
The economists expect it to push down the loan prime rate by another 70 basis points in the coming quarters.