Lending fuels China’s inflation
(15 February 2010 – China) China’s central bank has called for stricter controls to be placed around new credit, as government data reveals a surge of lending in January.
New lending last month increased to 1.39 trillion yuan (A$22.8 billion) and property prices soared at the fastest rate since April 2008, according to figures published by the National Bureau of Statistics.
China’s central bank called for vigilance against possible ‘hidden systemic financial risks and controls’, after the data was released.
In 2009, massive lending triggered fears that excess liquidity was fuelling inflation and encouraging spending sprees by spectators, resulting in property and stock market turbulence.
The central bank stressed that while credit funds will support current projects, loans for new projects are to be strictly controlled and said that pro-growth fiscal policies, which have been in place for the past year, will continue.
Inflation in January was lower than expected, with the consumer price index rising just 1.5 percent year-on-year.
In Europe last month, Credit Suisse confirmed six banks had halted new lending from January 19th until the beginning of February as a result of an emergency meeting of the central bank’s monetary policy bureau.
China’s central bank called for vigilance against possible ‘hidden systemic financial risks and controls’, after the data was released.
In 2009, massive lending triggered fears that excess liquidity was fuelling inflation and encouraging spending sprees by spectators, resulting in property and stock market turbulence.
The central bank stressed that while credit funds will support current projects, loans for new projects are to be strictly controlled and said that pro-growth fiscal policies, which have been in place for the past year, will continue.
Inflation in January was lower than expected, with the consumer price index rising just 1.5 percent year-on-year.
In Europe last month, Credit Suisse confirmed six banks had halted new lending from January 19th until the beginning of February as a result of an emergency meeting of the central bank’s monetary policy bureau.
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