By Xinhua

 

BEIJING -- New loans extended by Chinese banks were expected to grow at a steady but controllable pace for the rest of the year, according to the research center of one of China's leading banks. 

Chinese banks are expected to extend new loans between 7 trillion yuan ($1.08 trillion) and 7.5 trillion yuan in the whole year of 2011, compared with last year's 7.95 trillion yuan, the Financial Research Center of Bank of Communications said in a report Monday. 

The center attributed the "steady but controllable" growth of new loans this year to possible hikes of the reserve requirement ratio (RRR) for China's commercial banks and the lackluster housing market. 

After raising the RRR for commercial banks eight times since October 2010, the People's Bank of China, the country's central bank, has locked up a record 21 percent of bank deposits that would have otherwise been lent. 

The center also said the possibility of more interest rate hikes during the second half of this year is not high due to official fears over accelerated capital inflow, worsened financing for small and medium-sized enterprises and a possible economic slowdown.

From China Daily : Growth of new loans expected to be steady