China Credit Growth Climbs as Targeted Easing Kicks In
China’s broadest measure of new credit rose to a three-month high in September as the central bank’s targeted measures to boost liquidity helped spur lending.
Aggregate financing was 1.05 trillion yuan ($171 billion), the People’s Bank of China said today in Beijing, compared with the 1.15 trillion yuan median estimate in a Bloomberg survey of economists.
While holding off from broad cuts to interest rates or the overall level banks need to keep as reserves, the central bank has sought to bolster lending to targeted areas and reportedly injected 500 billion yuan into the largest lenders last month.
“The government efforts to support liquidity and guide interest rates lower have started to take some effect,” said Chang Jian, Chief China Economist at Barclays Plc in Hong Kong. “We continue to look for a recovery in sequential momentum.”
The decline is “welcome news” coming after the U.S. Treasury’s twice-yearly report to Congress on foreign exchange, Condon said. The U.S. said China has shown “some renewed willingness” to let the yuan strengthen while reiterating the currency “remains significantly undervalued.”
The yuan strengthened to 6.1229 versus the dollar, while stocks in China reversed losses after the credit data. China’s one-year interest-rate swap fell to a two-year low amid speculation of further policy easing.
Source: bloomberg- China Credit Growth Climbs as Targeted Easing Kicks In
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