China's new yuan loans contract in April as COVID hits
The headquarters of the People's Bank of China in Beijing, China, May 4, 2022. /CFP

The headquarters of the People's Bank of China in Beijing, China, May 4, 2022. /CFP

China's new yuan-denominated loans totaled 645.4 billion yuan (about $95.05 billion) in April, central bank data showed Friday, 823.1 billion yuan shorter than the same month last year.

The April figure is 79 percent lower than the 3.13 trillion yuan in new yuan loans in March, according to the People's Bank of China (PBOC), partially due to the impact of the epidemic.

The downside reflects "the recent epidemic impacts have further shown on the real economy," said PBOC in a statement. 

Coupled with factors such as material shortages and rising production costs, small and medium-sized enterprises had met more operational difficulties and the demand for effective financing demands dropped significantly, said PBOC.

In recent months, a new wave of COVID-19 has forced dozens of Chinese cities to go into "static management."

The central bank said it would leverage various monetary tools to keep liquidity at an ample level while ensuring stable credit growth.

While the country's macro leverage ratio may likely rise, it will stay within a reasonable range, PBOC said in the statement.

It also vows to continue to lower the financing cost for companies and offer targeted support to those hit hardest by the epidemic.

Friday's data showed that the M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 10.5 percent year on year to 249.97 trillion yuan at the end of last month, according to the People's Bank of China.

The M2 growth rate was 2.4 percentage points higher from the same period last year.

In April, the central bank injected a total of 48.5 billion yuan of net cash into the market, the data showed.

(With input from Xinhua)

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