China's new loans rise to 516.7 bln yuan in Sept.

China's new yuan-denominated loans in September rose to 516.7 billion yuan (75.68 billion U.S. dollars) from August's 410.4 billion yuan, the People's Bank of China, the central bank, said Wednesday.

New yuan-denominated loans in the first nine months stood at 8.67 trillion yuan, 5.19 trillion yuan more than the same period last year.

China's foreign exchange reserve hit a new high of 2.2726 trillion U.S. dollars at the end of September, according to the central bank.

China's monthly new loans had slowed from June's high of 1.53 trillion yuan to 355.9 billion yuan in July as a result of bank contracting credit and the central bank's open market operations. The figure rose to 410.4 billion yuan in August and then to September's 516.7 billion yuan.

The broad measure of money supply, M2, which covers cash in circulation and all deposits, was up 29.31 percent from a year earlier to 58.54 trillion yuan at the end of September.

The narrow measure of money supply, M1 (cash in circulation plus current corporate deposits), was up 29.51 percent to 20.17 trillion yuan.

CONTINUED PROACTIVE POLICY

Both figures added to the view that the world's third largest economy was on track for recovery based on a moderately easy monetary policy, said Ding Zhijie, deputy director of the School of Banking and Finance of the University of International Business and Economics.

Ding said the figures of money supply was sufficient to meet the demands of economic growth for the following months of the year and a moderately easy monetary policy would be maintained as the economic rebound is yet to be stable, firm and balanced.

Liu Yuhui, a researcher with the Institute of Finance and Banking of the Chinese Academy of Social Sciences (CASS), predicted that there would not be obvious contraction of new loans in the fourth quarter as investment of local governments would not drop sharply driven by the huge investment of the central government.

Chinese Finance Minister Xie Xuren said last week that China would continue to implement the proactive fiscal policy and moderately easy monetary policy to support growth in a speech to the plenary session of the International Monetary Fund (IMF) and the World Bank annual meetings held in Istanbul, Turkey.