REFILE-PREVIEW-China loan and money growth to slow in March

(Refiles to fix spelling in table)

* WHAT: China March money supply, loan data

* WHEN: No fixed time, but April 15 at latest

(M2 and loan growth are pct change y/y; new loans are bln


MEDIAN RANGE Feb/10 Mar/09
M2 22.3 20.5/27.0 25.5 25.5 22
New Loans 775 300/910 700.1 1890 20
Loan Growth 22.6 21.2/28.0 27.2 29.8 16


Money and credit growth are slowing appreciably as the
People’s Bank of China treads a path toward normalisation after
an unprecedented surge in bank lending last year.

The official stance of monetary policy is still described
as “appropriately easy”. But, in the recent words of deputy
central bank governor Hu Xiaolian, the stress this year is on
“appropriately” not “easy”.


If the consensus of 775 billion yuan in net new loans is
accurate, banks will have lent 2.89 trillion yuan in the first
quarter, or more than 38 percent of the 2010 quota of 7.5
trillion yuan — down from 9.6 trillion in 2009.

But because banks typically front-load their lending early
in the year, the authorities would be quite able to hit their
full-year target through a combination of window guidance and
the withdrawal of liquidity from the banking system.

Expectations in March that a third rise this year in banks’
required reserves was imminent proved wrong as the PBOC
resorted to more aggressive money market operations to drain

Still, economists say banks are holding excess reserves,
meaning that they face no binding constraint on new lending and
that the PBOC will have to keep sterilising inflows — perhaps
through higher reserve requirements — just to mark time.


Only seven of the 22 respondents to the survey forecast the
level of China’s foreign (Read more about foreign investment into China)-exchange reserves at the end of March.

The consensus was $2.59 trillion, up from $2.4 trillion at
the end of December.

For China’s Jan loan and credit data: [ID:nBJB003726]

China indicator fixed page: (ECONCN: )

All Chinese economic data: (CN/DATA: )

Breakdown of forecasts:

M2 New loans Loan growth
ANZ 23.0 750 ~
Bank of East Asia 22.4 900 22.9
BNP Paribas 23.5 850 23.0
BoA Merrill Lynch 23.8 800 22.6
China Merchants Bank 21.7 600 22.1
China Construction Bank 21.0 350 21.3
CICC 23.5 650 ~
Daiwa 21.4 650 ~
Essence Securities 23.6 690 27.0
Fortune Trust 22.0 700 22.3
Galaxy Securities 22.5 900 23.0
High Frequency Economics 20.9 ~ ~
ICBC 27.0 800 28.0
Industrial Bank 20.5 300 21.2
Industrial Securities 22.0 840 22.6
JP Morgan 22.5 800 22.6
Morgan Stanley 20.5 660 22.2
RBS 25.0 800 ~
Sealand Securities 22.0 ~ ~
Shenyin Wanguo Secs 23.5 800 22.6
SJS Markets 22.2 750 22.5
UBS 21.7 910 23.0
For more news on China’s economy (Read more about the fastest growing economy.), click [CN-MCE-RTRS-LEN]

Investing Research

(Reporting by Beijing newsroom; Writing by Alan Wheatley;
Editing by Kim Coghill)

REFILE-PREVIEW-China loan and money growth to slow in March