Bank loans overshoot January target

New bank loans in the mainland during January hit US$182.89 billion, which overshot the central bank's cut-off target by at least 20 percent.

There are now indications that loans in the first quarter could be in the range of 2.6-3 trillion yuan.

But the central bank does not plan to penalize banks that went to far with their loans last month.

"New loans in January were way over the target," China Securities Journal reported, citing a source familiar with the situation. "The loan target will probably be set at between 700 billion and 800 billion yuan for February and 1 trillion yuan for March with the aim of curbing liquidity."


On that, "reserve requirements will likely rise another 200 basis points this year," said Credit Suisse Asia Pacific economist Tao Dong.

The central bank had planned to keep new loans in January within 12 percent of the total for this year. It has a target of about 16 percent for M2 growth - the broad measure of money supply - to combat inflation.