Money

Growth of new loans expected to be steady

(Xinhua)
Updated: 2011-06-14 09:37

BEIJING -- New loans extended by Chinese banks were expected to grow at a steady but controllable pace for the rest of the year, according to the research center of one of China's leading banks.

Chinese banks are expected to extend new loans between 7 trillion yuan ($1.08 trillion) and 7.5 trillion yuan in the whole year of 2011, compared with last year's 7.95 trillion yuan, the Financial Research Center of Bank of Communications said in a report Monday.

Related readings:  China plans 7t yuan of fresh lending in 2011  Credit supply may top govt targets  New lending shrinks to 551.6b yuan in May  Lending curbs hit nation's property developers

The center attributed the "steady but controllable" growth of new loans this year to possible hikes of the reserve requirement ratio (RRR) for China's commercial banks and the lackluster housing market.

After raising the RRR for commercial banks eight times since October 2010, the People's Bank of China, the country's central bank, has locked up a record 21 percent of bank deposits that would have otherwise been lent.

The center also said the possibility of more interest rate hikes during the second half of this year is not high due to official fears over accelerated capital inflow, worsened financing for small and medium-sized enterprises and a possible economic slowdown.