China's new yuan loans likely surged in September, according to a Reuters poll, as the central bank boosted stimulus efforts to revive the struggling economy.
Banks are estimated to have issued 1.87 trillion yuan in loans last month, more than double August's 900 billion yuan, though still lower than the 2.31 trillion yuan issued in September 2023.
To counter the slowdown, China’s central bank launched its most aggressive monetary stimulus since the pandemic, including mortgage rate cuts and other property market support. Additional policy easing is expected, with Chinese leaders also promising necessary fiscal measures to meet the growth target of around 5% for 2024.
Despite these efforts, household and corporate confidence remains weak, with outstanding yuan loans predicted to grow by 8.3% in September, a slight dip from August's 8.5%, marking a record low. Meanwhile, the growth rate of broad money supply M2 is expected to accelerate from 6.3% to 6.4%.
Increased government bond issuance could help lift total social financing (TSF), a key measure of liquidity and credit. TSF in September is expected to have risen to 3.73 trillion yuan from 3.03 trillion yuan in August. The official data will be released between October 10-15.