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BEIJING, November 8 (TMTPOST) — The average number of economists' forecasts for new yuan loans in October was 863.57 billion yuan ($119 billion), which is a slight increase from 826.2 billion yuan in October 2021, but a sharp drop of 65% from the September figure of 2.47 trillion yuan ($340.65 billion), according to a recent survey of 14 domestic and foreign institutions by Caixin Media.

Bank credit is usually characterized by a surge at the end of the quarter and a fall at the beginning of a new quarter. Loans and social financing usually come in seasonal "depression" in October, both of which are expected to fall significantly from the previous month but increase slightly year-on-year.

The frequent occurrence of pandemics in many places since October has hurt residential consumption, corporate production, and business activities. The slow recovery of property sales, the drag on credit from the residential sector, and the fall in exports also weakened financing demand to some extent.

At the beginning of the month, banks concentrated on lending public loans to infrastructure industries. However, by the end of the month, interest rates in the bill market continued to fall, with the interest rate on one-month bills falling to nearly zero. CITIC Securities macro research team pointed out that this reflects the lack of endogenous credit demand.

The macro research team of Haitong Securities also believes that the credit input in October may probably see a low again. Considering that the credit in September was significantly higher than expected, the concentrated input will consume more project reserves, and the improvement in financing is more likely to continue.

In terms of social financing, the average number of interviewed economists' forecast for social financing in October was 1.61 trillion yuan ($222 billion), down nearly 54% from 3.53 trillion yuan ($486.78 billion) in September and up slightly from 1.59 trillion yuan ($219.26 billion) in the same period in 2021.