China keeps credit tap open to bolster growth despite a spike in pork-driven consumer inflation

The People’s Bank of China (PBOC) said banks extended 1.69 trillion yuan (US$240 billion) in September, a rise from 1.21 trillion yuan in August.

September’s consumer price index rose to 3.0 per cent, largely due to soaring pork prices, hitting the upper limit of Beijing’s consumer price index for 2019

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A People’s Bank of China survey in over 300 cities also showed that corporations still have strong demand for credit, with around 60 per cent of those surveyed stating that demand will increase in the fourth quarter of 2019, according to Ruan. Photo: Reuters

Published: 7:01pm, 15 Oct 2019Updated: 12:11am, 16 Oct 2019

China’s central bank maintained its support for businesses and households in September, and is determined to provide more financing help even after consumer inflation hit the limit of the government’s comfort zone due to soaring pork prices.

The People’s Bank of China (PBOC) said on Tuesday that banks extended 1.69 trillion yuan (US$240 billion) in September, a rise from 1.21 trillion yuan in August.

Aggregate financing, which measures the country’s overall credit to the real economy and includes bank loans, bond issuance, trust loans and bill financing, rose from 1.98 trillion yuan in August to 2.27 trillion yuan last month.

The growth of M2, the broad measure of money supply, increased by 8.4 per cent by the end of September, up 0.2 percentage points from a month earlier.

The month-on-month rise was partly due to the PBOC’s adjustment of aggregated financing, which included some asset-backed securities, mainly those issued on stock exchanges, said Ruan Jianhong, head of the central bank’s statistics department.