BEIJING (Reuters) - China's new yuan loans likely rebounded sharply in May after a drop in April, a Reuters poll showed, as the central bank ratchets up policy support for the slowing economy.
Chinese banks are estimated to have issued 1.3 trillion yuan ($194.71 billion) in net new yuan loans last month, doubling the 645.4 billion yuan in April, according to the median estimate in the survey of 27 economists.
But the expected new loans would be lower than the 1.5 trillion yuan issued in the same month a year earlier.
The Chinese government has stepped up support for the slowing economy as Shanghai and other cities ease COVID-19 lockdowns and mobility restrictions following a drop in new infections.
The cabinet announced a package of policy steps last month, including broader tax credit rebates and postponing social security payments and loan repayments to support the economy.
Local media reported last month that China's financial authorities had told commercial banks to speed up lending.
In May, the central bank cut its benchmark reference rate for mortgages by an unexpectedly wide margin, its second reduction this year, in a bid to revive the ailing housing sector to prop up the economy.
The downward pressure on China's economy remains striking and China will strive to achieve reasonable economic growth in the second quarter, state media quoted the cabinet as saying on Wednesday.
China has pledged to keep money supply and total social financing growth basically in line with nominal economic growth this year.
Outstanding yuan loans were expected to grow by 10.7% in May from a year earlier, down from 10.9% in April, the poll showed. Broad M2 money supply growth in May was seen at 10.4%, down from 10.5% in April.
China has set the 2022 quota for local government special bond issuance at 3.65 trillion yuan, unchanged from last year.
Any acceleration in government bond issuance could help boost total social financing (TSF), a broad measure of credit and liquidity. Outstanding TSF rose 10.2% in April, down from 10.6% in March.
In May, TSF is expected to fall to 2.02 trillion yuan from 910.2 billion yuan in April.
($1 = 6.6765 Chinese yuan renminbi)