China new December bank lending well below forecasts

BEIJING (REUTERS) - Chinese banks extended 697.3 billion yuan (S$150.11 billion) in new loans in December, well below market expectations despite instructions from the central bank to lend more in the last months of 2014 to support the slowing economy.

The central bank also said on Thursday that China's broad M2 money supply measure grew 12.2 per cent in December, below expectations for a 12.5 per cent increase.

New local-currency loans totalled 9.78 trillion yuan for the full year, up about 10 per cent from 8.89 trillion yuan in 2013.

The world's second-largest economy is expected to post its lowest annual GDP growth in 24 years on Tuesday, demonstrating that relatively robust lending is no longer translating into as much economic activity as in previous years.

Policymakers are monitoring the risks stemming from a cooling property market, rising debt and soft domestic demand.

Outstanding yuan loans increased 13.6 per cent in the final month of the year, compared with 13.4 per cent in November.

Total social financing (TSF), a broad measure of liquidity designed to also capture some lending outside of traditional banking, was 1.69 trillion yuan in December compared with 1.15 trillion for November.

That put TSF at 16.46 trillion for the year against 17.29 trillion in 2013.

China seesawed from recording the most new yuan loans in four years in January to banks issuing the fewest loans in July since 2009.

China's foreign exchange reserves were at US$3.84 trillion (S$5.12 trillion) at the end of 2014, versus US$3.89 trillion at the end of September.

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