Thursday, March 4, 2010

China Lowers Lending Target; Exporters Demand “Stable” Yuan


Li told the official Xinhua news agency that Bank of China would pay particular attention to credit risk with a view to promoting the bank’s long-term, sustainable growth.

His comments chime with the directives of the China Regulatory Banking Commission, which has lowered its 2010 lending target to about 7.5 trillion Yuan from a record 9.6 trillion Yuan last year, when banks rushed to pump up growth at the government’s behest.

“In 2009 the pace of lending was not normal. It was meant to meet special demands in a special time of financial crisis” Xinhua paraphrased Li as saying.

The CBRC has repeatedly called on banks to lend at a more regular rhythm and to strengthen their risk management in order to prevent an increase in bad loans.

In related news exporters at Shanghai’s largest international trade fair said they can bear Yuan gains of little more than 2% this year, putting pressure on the central bank to limit appreciation sought by the US and Europe. Read more here.