China's central bank expected to maintain monetary stance

Date : 2013-12-13  | From : Xinhua

Higher-than-expected growth in China's new RMB lending and total social financing in November indicates that China's liquidity conditions remain favorable for 7.5 percent or higher GDP growth, and the central bank is likely to maintain its monetary stance, economists said.

Market participants had been worried over possible credit tightening measures by the central bank, the People's Bank of China (PBOC), due to a jump in yields on Chinese government bonds (CGB) in mid-November.

Last month, CGB yields soared, with the 10-year CGB yield jumping to 4.7 percent on Nov. 20 -- the highest level in nine years -- from a mere 3.23 percent in mid-June.

The 10-year CGB yield retreated to 4.43 percent on Nov. 27. At the time, markets worried that the rise in bond yields was engineered by the PBOC to reduce leverage and slow credit growth.