BEIJING, Nov 21 — China’s central bank has told some banks to bring forward some of the loans they plan to extend in early 2024 to late this year and to not overdo lending in the first quarter, three sources with knowledge of the matter said.
The move appears aimed at having fewer periods of sharp growth and then declines in lending. The sources said the banks have been asked to make sure the value of new loans in the first quarter of 2024 does not exceed the quarterly average of the past five years.
Lending by Chinese banks surged 27% in the first quarter of 2023 to a record 10.6 trillion yuan (US$1.5 trillion) after regulators urged them to front-load lending in the wake of nearly three years of Covid-19 restrictions.
After that, however, loan issuance decreased sharply due to weak credit demand, fueling volatility in the yuan and Chinese stocks.
The People’s Bank of China gave its so-called “window guidance” — unofficial policy directives with no written documents — to some banks, which included state-owned and city commercial lenders, this week, the sources said.
The sources were not authorised to speak to the media and declined to be identified. The People’s Bank of China did not immediately respond to a Reuters request for comment.
The central bank guidance was first reported by Bloomberg.
The directive comes after a meeting of the central bank and financial regulators on Friday at which they pledged to ensure steady increases in credit so that the economy can grow in a stable manner.
— Reuters
