PBOC Urges Chinese Banks to Boost May Lending Activity
The People's Bank of China issued informal guidance to state-owned banks to increase lending following an unexpected contraction in April. Policymakers are attempting to stabilize the economy as high energy costs and a property downturn continue to dampen domestic credit demand.
The People's Bank of China (PBOC) instructed major lenders to boost lending in May due to ongoing credit weakness. The informal guidance follows an unexpected contraction in new yuan loans during April. Investors view the move as a critical attempt to stabilize growth as domestic demand falters and external energy risks rise.
### PBOC Targets Credit Expansion The PBOC issued the guidance to state-owned banks late last week after household and corporate loan demand remained stagnant, people familiar with the matter said. This intervention underscores Beijing's urgency to support an economy currently squeezed by high energy costs. While the central bank did not comment, the guidance mirrors similar instructions issued in April to prevent a credit slowdown.
