China’s Aug New Yuan Loans to Rebound from 9-Month Low

Yuan

According to a poll, China’s new yuan loans should rebound in August from nine-month lows. The central bank is seeking to support the country’s economic recovery.

In August, banks should have provided 1.30 trillion yuan ($201.21 billion) in net new yuan loans. That was up from 1.08 trillion yuan in July, according to the median estimate in the survey of 31 economists.

That said, it would be higher than the 1.28 trillion yuan issued the same month a year ago.

Central bank officials said that China would maintain a prudent monetary policy. With that, expectations for near-term easing relaxed.

On Tuesday, central bank vice governor Pan Gongsheng said the country would maintain a prudent monetary policy. He also said it would not resort to flood-like stimulus.

Sun Guofeng, the central bank’s monetary policy department, said there is no shortfall of base money or liquidity supply. Demand would remain balanced in the coming months, he added.

The People’s Bank of China (PBOC) released around 1 trillion yuan in long-term liquidity. It cut the reserve requirement ratio (RRR) for banks in July. Another RRR cut is anticipated by analysts this year.

According to the poll, annual outstanding yuan loans for August should have increased by 12.3%, the same as July. Also, in August, broad M2 money supply growth showed at 8.4%. It was higher than the previous month’s 8.3%. 

The finance ministry data showed China’s local governments issued a net 1.3546 trillion yuan in special bonds. That was in the first seven months of this year.

 

Shanghai City Plans to Set up A Data Exchange

 

Meanwhile, Shanghai city plans to set up a data exchange, said vice mayor Wu Qing on Thursday. The plan aims to help improve efficiency in the manufacturing industry as the city strives to promote the digitalization of supply chains.

Wu told a press conference that China’s business hub would urge companies to share some data. Improvement of data regulations would also be encouraged.

Many complaints were received about mismanagement and misuse, resulting in user privacy violations. Thus, Chinese regulators have urged firms to ensure better handling of different kinds of data.

The Data Security Law that sets a framework for companies for classifying data was implemented on Sept. 1. Classification is based on its economic value and significance to China’s national security.

Earlier this year, Beijing city set up a firm to run a big data exchange.

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