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2nd LD-Writethru: China's new yuan loans pick up in H1

Xinhua, July 14, 2015 Adjust font size:

China's new yuan-denominated loans reached 6.56 trillion yuan (1.07 trillion U.S. dollars) in the first half of this year, the central bank said Tuesday.

Loan volume was 537.1 billion yuan higher than the same period of last year, the People's Bank of China said in a statement.

New yuan loans in June alone reached 1.27 trillion yuan, higher than the previous four months and beating general market expectations, said HSBC analyst Qu Hongbin.

Loans to households last month reached the highest level in a year and a half, mostly due to the warming up of recent property market sales, Qu said.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 11.8 percent year on year to 133.34 trillion yuan at the end of June, the statement said.

The growth was higher than 10.8 percent at the end of May, but was lower than 12.2 percent at the end of last year.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, expanded 4.3 percent year on year to 35.61 trillion yuan at the end of last month.

Qu said the rebound in M2 is largely related to the heavy increase in new loans and easing monetary policies in previous months.

The central bank has cut both the reserve requirement ratio and interest rates three times since the beginning of this year.

"Generally speaking, the improved monetary supply condition will bolster the bottoming out of China's economy in the latter half of this year," according to Qu.

China's total social financing, a measure of funds to non-financial firms and households from the financial system, stood at 8.81 trillion yuan in the first half, down 1.46 trillion yuan from a year earlier.

By the end of June, the stockpile of foreign exchange reserves stood at 3.69 trillion U.S. dollars. Endi