Stimulus exit: China steps off credit pedal | business | Hindustan Times
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Stimulus exit: China steps off credit pedal

The pace of money and credit growth in China slowed markedly in June as the central bank steered its anti-crisis monetary policy back to normal, while the country’s official currency reserves barely grew in the last quarter.

business Updated: Jul 11, 2010 22:02 IST

The pace of money and credit growth in China slowed markedly in June as the central bank steered its anti-crisis monetary policy back to normal, while the country’s official currency reserves barely grew in the last quarter.

Banks extended 603.4 billion yuan in net new local-currency loans last month, in line with expectations, but down from May’s 639.4 billion yuan and less than half of last June’s 1.53 trillion yuan, the People’s Bank of China said on Sunday.

As a result, year-on-year growth in the stock of outstanding yuan loans fell to 18.2 per cent at the end of June from 21.5 per cent in May and 33.8 per cent in November.

“China's efforts to avoid overheating since the end of last year have restricted banks’ ability to extend loans to the property sector as well as to investment vehicles backed by local governments,” said Dong Xian'an, chief macro economist with Industrial Securities in Beijing.