China's October new bank loans shrink for third time this year as credit demand weakens
FXI•China's new yuan loans shrank by 100 billion yuan in October, the third monthly decline this year, while outstanding loan growth fell to a record low of 4.7%. M2 money supply growth slowed to 7.1%, its lowest pace in 19 months.
1. October lending contracts
China's new yuan loans shrank by 100 billion yuan ($14.99 billion) in October, according to calculations based on People's Bank of China data. Analysts polled by Reuters had expected loans to reach 20 billion yuan, compared with 220 billion yuan a year earlier. Household loans fell by 430 billion yuan and corporate loans contracted by 160 billion yuan.
2. Money growth slows
Outstanding yuan loans rose 4.7% from a year earlier, a record-low growth rate. M2 money supply expanded 7.1%, below analysts' 7.2% forecast and down from 7.2% in September. The central bank reiterated its moderately loose monetary policy stance and said it would adjust policy tools in a timely manner.
