China’s credit expansion picked up more than expected in January from a year ago, thanks to banks’ seasonal lending push and strong sales of government bonds.
January is traditionally a peak season for lending activity, as banks rush to tap their abundant loan quota at the beginning of the year. Credit growth also benefited from a surge in government bond sales, which reached an all-time high for January at 920 billion yuan, according to a note by Citigroup Inc. economists published prior to the data release.
China’s economic activity in the factory and services sectors unexpectedly faltered at the start of the year after a rebound in the fourth quarter, showing the risk that more policy support will be needed to prevent another growth slowdown. Even though Chinese residents shattered records for travel and movie attendance during the Lunar New Year holiday, the spending has yet to translate into a turnaround for the consumer economy.
The PBOC has refrained from easing monetary policy in recent months as it prioritized defending the yuan. It’s maintained its support for the currency even after the US and China entered into their latest trade war, setting its daily reference rate for the yuan at strong levels.
This article was generated from an automated news agency feed without modifications to text.
