Economists Predict New Loans Fell Sharply in July

By Zhao Hongmei, Cheng Zhiyun
Published: 2009-08-04

News, page 5
Translated by Liu Peng
Original article:

As July drew to an end, many in the market began to predict the value of new loans had been issued over the past month.

According to statistics released by the central bank last month, new loans in June exceeded 1.5 trillion yuan, which raised the number of new loans issued in the first half to 7.37 trillion yuan.

"We estimate that new loans in July amounted to less than 500 billion yuan," said a source close to the central bank.

This figure is much higher than what Lin Songli,an analyst with the Guosen Securities Company, is expecting. He believes that new loans issued in July reached about 300 billion yuan, he went on to add that he wouldn't be surprised if the final figure was closer to 200 billion yuan.

Lu Zhengwei, a senior economist at Industrial Bank, noted that it was likely that new loan issuance in July eased back to between 400 billion and 600 billion yuan.

A source from credit management department in the Industrial and Commercial Bank of China (ICBC), told the Economic Observer that new loans issued by ICBC in July reached 30 billion yuan, and that China Construction Bank released 70 billion yuan in new loans.

China's central bank released an announcement last Wednesday evening, pledging it would continue to stick to a "moderately loose" monetary policy. This was the third time in six days that the central bank had assured the public that, aside from some "fine tuning", it has no intention of altering monetary policy.

The loose monetary policy pursued in the first half of the year has allowed excessive liquidity to flood the market and has been accompanied by both a sharp rise in asset prices and also increased fears of inflation.