October is seasonally weak for lending; markets expect new RMB loans to show a
smaller YoY increase. Social financing may post a YoY increase supported by
government bond issuance, with MoM social financing growth potentially
rebounding. China International Capital Co expects RMB loans to fall by about
100 billion yuan in October. Major state banks’ 3-month rediscount rate hovered
near 0.5% all month and did not spike at month-end; 3-month interbank NCD
issuance rates are also eased, which may reflect persistently weak credit supply.
Experience from last October’s policy-bank tool injections suggests policy bank
instruments’ lift to corporate lending can be delayed.
