According to the report from the People's Bank of China (PBoC), in March, Chinese banks provided new loans in yuan in the amount of 3.640 trillion yuan. Therefore, credit growth accelerated sharply compared to February (1.010 trillion yuan). Economists had expected lending to grow by 3.0 trillion yuan. For the first quarter, total new loans rose to 9.78 trillion yuan from 9.46 trillion yuan in the same period last year. Overall, the latest lending data may boost confidence in the economy and delay the expected reduction in banks' reserve requirement ratio (RRR), while fiscal policy stimulus aimed at boosting domestic demand may still be the key to countering the effects of an escalating trade war.
Meanwhile, total social financing grew by 5,890 trillion yuan, compared with an increase of 2,230 trillion yuan in February (revised from 2,290 trillion yuan). Consensus estimates suggested an increase of 4.800 trillion yuan.
The PBoC said that in March, M2, the widest measure of money supply, rose by 7.0% per year after a similar increase in February and January. Economists also expected growth of 7.0%. Outstanding loans in yuan rose by 7.4% per year compared with +7.3% per year in February (the lowest increase on record). Consensus estimates suggested an increase of 7.3% per annum.