China’s new RMB loans reached RMB1.02 trillion in February, beating market expectations of RMB750 billion, according to data released by the People’s Bank of China.
Outstanding RMB loan grew by 14.3% in February year-on-year. The aggregate social financing was RMB1.35 trillion, also beating market consensus.
China’s M2, a broad measure of money supply, increased 12.5% year-on-year in February, up from 10.8% in the prior month.
While the M2 growth sped up, the market liquidity conditions remained tight in February, indicating that the effect of easing effort has remained limited so far, according to a report by ANZ.
The bank forecasts that China will cut banks’ reserve requirement ratio by another 100 basis points, and lower the deposit rate by 25 basis points this year.