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China's Bank Lending Increases In June

China's bank lending increased in June, figures from the People's Bank of China showed on Friday.

Banks extended CNY 1.66 trillion in June compared to CNY 1.18 trillion in May. New yuan lending was forecast to rise to CNY 1.67 trillion.

Similarly, aggregate financing climbed to CNY 2.27 trillion from CNY 1.4 trillion in the previous month. The expected level was CNY 1.9 trillion.

The broad money supply M2 grew at a steady pace of 8.5 percent in June. Economists had forecast an increase of 8.6 percent.

With the monetary transmission mechanism being dampened by wider credit spreads and tight regulation of shadow banking, the pick-up in lending has been modest relative to previous loosening cycles and is unlikely to prevent economic growth from slowing further in the coming quarters, Julian Evans-Pritchard, an economist at Capital Economics, said.

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