China October new bank loans drops to 22-month low, more easing expected


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China October new bank loans drops to 22-month low, more easing expected

On Monday, the 11th of November 2019, China’s Central Bank had released a monthly bank loan report for October according to which the Peoples’ Bank of China (China’s Central Bank) had been witnessing a sharp downturn of new bank loans in China, a critical indicator for investment appetite, while the figure hits its lowest in just a shy of two years last month.

Nonetheless, following reveal of the report, analysts were quoted saying that a drop of such scale was expected due to seasonal factors alongside lack of investment appetite amid a 16-month long Sino-US trade war, however, an analysts’ group had also added that further monetary easing and economic support for small- and medium-scale businesses in form of long-term low-cost debts were expected to amp up the freezing economy of China, which appeared to be drowning alongside United States due to extended tariffs on each other’s products.

Meanwhile, citing optimism over China’s Central Bank on more monetary easing over the coming months, Julian Evans-Pritchard at Capital Economics wrote in a client note, “We think the central bank will need to loosen policy more aggressively in the coming months in order to drive a turnaround in credit growth and prevent economic activity from slowing too abruptly.

” However, according to China’s Central Bank’s report that released late on Monday (November 12th), Chinese banks, all of which were state-owned, had extended ¥661.3 billion in new loans last month, marking its weakest level since December 2017 and missing an analysts’ estimate by a wider margin.