Broad credit growth fell to a fresh record low last month, dragged down by continued weakness in bank lending. Household borrowing remained the main drag, reflecting weak appetite for debt-financed consumption and subdued mortgage demand. We doubt the current weakness will prompt near-term rate cuts, not least given renewed inflationary pressures from the Middle East conflict, although growing financial strains among indebted firms will eventually push the PBOC to resume easing.
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