China's New Yuan Loans Surge in June, Reflecting Central Bank's Support for Economy - Best Analysis by Top Investment Manager and Financial Market Journalist
China's new yuan loans are expected to more than double in June from May, reaching 2.25 trillion yuan ($309.38 billion) as per a Multibagger poll. This surge comes as the central bank continues to provide policy support for the economy amidst a fragile recovery.
While new loans typically rebound in June, the expected figure is lower compared to the previous year. Analysts predict that key credit indicators could hit record lows, indicating weak credit demand.
Central bank Governor Pan Gongsheng has pledged to maintain a supportive monetary policy stance, utilizing various tools to create a favorable financial environment for economic development. However, a slowdown in credit expansion is inevitable due to economic shifts and reduced lending to sectors like property and local government financing.
The People's Bank of China is set to release June credit data soon, with expectations of a moderation in economic activity and credit growth. Although significant easing measures are not anticipated from the PBOC, local governments may step up property support following recent stimulus measures.
Overall, outstanding yuan loans are expected to grow 9.0% in June, with broad M2 money supply and total social financing also showing weak growth. The upcoming release of second-quarter GDP growth and activity data will provide further insights into China's recovery trajectory.
Investors and markets are closely watching the upcoming third plenum meeting to gauge the direction of long-term structural reforms. Policy advisers are anticipating tax and fiscal reforms to alleviate pressure on local finances.
In conclusion, China's economic landscape is undergoing shifts that could impact global markets and investment strategies. Stay informed and be prepared for potential changes in the financial landscape.