China Likely to Slash 2011 New Loan Target

The China Banking Regulatory Commission is expected to cut new lending to 6.6 trillion yuan ($994 billion) for 2011, down 12% from this year’s target, reports Bloomberg.


“For the People’s Bank of China to win the battle over inflation, it will have to slow money growth,” says Sanford C. Bernstein & Co. in a note obtained by Bloomberg. Bernstein’s analysts expect the annual new loan target to be 6.5 trillion yuan to 7.5 trillion yuan through 2015.


According to Bloomberg, China’s inflation accelerated to 4.4% last month, the fastest pace in two years, bolstering the case for the policy makers to do more to soak up liquidity and cool the economy.


Citing central bank data, Bloomberg says Chinese banks have advanced about 6.9 trillion yuan of new loans this year, nearing the government’s cap of 7.5 trillion yuan for 2010.



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