The Chinese yuan is falling against several major currency rivals to start the trading week, despite positive economic data that should lift the yuan. The central bank confirmed that small business lending surged in May, leading bankers to be optimistic on the worldâs second-largest economy as the second quarter comes to an end. With the US-China trade war still lingering in the background, can Beijing finally turn a corner?
According to the Peopleâs Bank of China (PBOC), financial institutions have increased their lending to smaller businesses in the first five months of 2019, suggesting that the banking system is listening to the federal governmentâs demands for economic support. The central bank reported that the number of outstanding loans to small and micro firms climbed to $1.5 trillion by the end of May, up 21% year on year.
Zou Lan, deputy head of the PBOCâs financial markets department, said the nationâs top five lenders have increased lending to small enterprises by 23.7%. Also, the non-performing loan ratio for lending to small business across the industry was 5.9%, down from 6.2% last year.
Overall, the average lending rate to these companies by the countryâs five main banks was 4.79%, down from 5.44% in 2018.
It is these developments that are causing Chinese bankers to be upbeat on the nationâs economic growth. The PBOC surveyed senior management officials at more than 3,000 financial institutions. The study revealed that 74.6% thought the macroeconomy in the second quarter was normal and 83.4% believe the current monetary policy was moderate.
In other data, pork imports climbed 63% last month from the same time a year ago. Chinese imports totaled 187,459 tonnes, the biggest since the 192,348 tonnes in August 2016.
The worldâs biggest consumer of pork increased its supplies ahead of a potential shortage. Because of the African swine fever sweeping the nationâs farming sector, the country has slashed the size of its herd to limit the damage from infected pigs. Although demand has weakened in recent months, Beijing is warning that demand is likely to be rejuvenated in the coming months. Still, China is planning to beef up inspections on meat ports and has blocked three Canadian pork exporters from accessing its market.
The USD/CNY currency pair rose 0.1% to 6.8771, from an opening of 6.8699, at 14:51 GMT on Monday. The GBP/CNY advanced 0.13% to 8.7532, from an opening of 8.7419.
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