BEIJING (Reuters) - China's new yuan loans are expected to have rebounded in May after a sharp drop in April, a Reuters poll showed, as the central bank keeps policy accommodative to support a fragile economic recovery.
Chinese banks are estimated to have issued 1.60 trillion yuan ($225 billion) in net new yuan loans last month, more than doubling the 718.8 billion yuan in April, according to the median estimate in the survey of 27 economists.
Yet the forecast new loans would be still lower than the 1.89 trillion yuan issued in the same month a year earlier.
The loans data could be released by the People's Bank of China anytime between now and over the next week.
China's economy rebounded faster than expected in the first quarter but lost momentum at the beginning of the second. The economy is grappling with a high unemployment rate, a sluggish real estate market and rising geopolitical tensions.
China in March cut the banks' reserve requirement ratio (RRR) for the first time in 2023, but has kept its benchmark lending rate unchanged this year, as widening yield differentials with the United States limited the scope for substantial monetary easing.
Economists say the government may further cut RRR and interest rates in the second half of this year to bolster the economic recovery.
The central bank has pledged to keep money supply and total social financing growth generally in line with nominal economic growth this year.
Outstanding yuan loans were expected to have risen by 11.6% in May year-on-year, almost steady from the 11.8% increase in April, the poll showed. Broad M2 money supply growth in May was seen at 12.1%, slowing from 12.4% in April.
Any acceleration in government bond issuance could help boost total social financing (TSF), a broad measure of credit and liquidity. Outstanding TSF was 10.0% higher at April-end than a year earlier, the same as the annual growth rate seen at the end of March.
China has set the 2023 quota for local government special bond issuance at 3.8 trillion yuan, up from 3.65 trillion yuan last year.
In May, TSF is expected to have increased to 2.00 trillion yuan from 1.22 trillion yuan in April.
($1 = 7.1220 Chinese yuan renminbi)