China’s central bank signals sustained easing after June new yuan loans miss forecasts by ¥390 billion.
The People’s Bank of China reaffirmed plans to maintain an appropriately loose monetary stance and intensify counter-cyclical adjustments. The move follows weaker-than-expected credit data, with new yuan loans totaling ¥1,610 billion in June, well below the ¥2,000 billion forecast.
June’s loan growth marks a slowdown from prior months, while M2 money supply growth decelerated to 8%. Q2 GDP growth hit 4.3%, the weakest pace in over three years, underscoring persistent economic headwinds. The PBOC also noted ample interbank liquidity but muted credit demand.
The central bank will keep the 7-day reverse repo rate as its main policy anchor and explore increasing overnight reverse repo operations to improve liquidity management. It also pledged to maintain yuan stability amid two-way fluctuations driven by global uncertainties.