China's central bank pushes banks to boost April lending

China’s central bank has instructed some commercial banks to increase loan issuance in April, according to sources familiar with the matter, as authorities aim to prevent a sharp slowdown in credit growth amid rising external economic risks, News.Az reports, citing Reuters.

The People’s Bank of China (PBOC) held a meeting in which it asked banks to ensure that outstanding loan balances show positive month-on-month growth in April in order to support the economy, the sources said.

The sources declined to be identified as they were not authorised to speak to the media.

The PBOC did not immediately respond to a request for comment.

Such a meeting, in which the central bank explicitly calls on banks to expand credit, is considered rare. It comes at a time when concerns are growing over the impact of the Middle East conflict on the world’s second-largest economy, which is already facing sluggish consumption and a debt-laden property sector.

Analysts expect credit data for April to weaken, as the month is typically a “low season” for loan demand. Banks usually front-load lending in the first quarter during traditional sales campaigns, which makes subsequent months appear relatively weaker.

The guidance suggests policymakers are concerned about an uneven economic recovery and subdued effective financing demand. By encouraging financial institutions to maintain a steady lending pace, authorities aim to avoid a sharp contraction in credit and support lenders’ role in stabilising growth, the sources said.

New bank lending in China rose less than expected in March, pointing to softer underlying credit demand as borrowers’ expectations for income and growth weaken.

China’s economy gained some momentum in the first quarter, supported by strong exports, but growth is expected to slow over the rest of 2026 as the Iran crisis threatens corporate profits and weighs on overseas demand, according to a Reuters poll.

Beijing has set a budget deficit of around 4% of GDP for 2026 and plans significant bond issuance to support growth, while the PBOC has pledged to maintain an accommodative policy stance despite limited room to cut interest rates as inflation continues to edge higher.

News.Az 

By Nijat Babayev