An Important Factor In Tight Monetary Policy: A Surge In Foreign Exchange Loans
The rapid rise of foreign exchange loans is opening up a tight monetary policy gap. This phenomenon has also aroused the vigilance of the regulatory authorities.
Recently released by the people's Bank of China's monetary and credit data in the first quarter showed that China's foreign exchange loans showed a sharp rise in the first quarter following the rapid growth in the second half of 2007. By the end of the first quarter of 2008, the balance of foreign exchange loans of our financial institutions was 268 billion 800 million US dollars, an increase of 56.92% over the same period last year, and loans increased by US $48 billion 800 million in the first quarter, an increase of 46 billion 200 million US dollars compared with the same period last year, which is 95.5% of the increase in foreign exchange loans in 2007. In February, foreign exchange loans increased by US $21 billion 400 million in one month, accounting for 44% of the increase in foreign exchange loans in the first quarter.
Relevant data also showed that as of the end of 3, Shanghai's foreign exchange balance loan to deposit ratio was 186.3%, up 15.8 percentage points from the end of last year. The national foreign exchange balance loan to deposit ratio also increased from 137.46% at the end of 2007 to 173.08%.
Before this, the attention of all sectors to the control of credit scale has been concentrated on RMB loans, and the central bank's demand for credit scale control of commercial banks has not emphasized the foreign exchange portion.
However, if the new foreign exchange loans are singled out, it is easy to see that the rapid rise of foreign exchange loans has largely affected the expansion of the overall credit scale. With the current average exchange rate converted, the proportion of new foreign exchange loans in the first quarter of 2007 and the whole year of 2007 increased by 1.39% and 9.30% respectively, while in the first quarter of 2008, new foreign exchange loans accounted for 20.4% of the total loan increment.
Zhao Qingming, senior manager of the research bank of the Construction Bank, believes that the increase in foreign exchange loans and the increase in absolute amount of new foreign exchange loans directly affect the actual effect of macroeconomic regulation and control. "In February this year, foreign exchange loans accounted for nearly 40% of the credit increment of the month, which has attracted the attention of regulatory authorities at that time. Since then, the NDRC has approved the new position of commercial banks to increase their foreign debt position, which has been controlled from the main source of foreign exchange loans.
Analysts at the Shanghai headquarters of the central bank believe that the trend of foreign exchange loans in new loans can not be underestimated. "On the one hand, foreign exchange loans involve the effect of total credit control. On the one hand, exchange rate movements may affect the quality of foreign exchange loans of commercial banks at any time." These people said.
Yin Jianfeng, director of the Financial Research Office of the Financial Research Institute of the Chinese Academy of Social Sciences, has the same concerns. He believes that there are two main reasons for the sharp increase in foreign exchange loans. First, domestic interest rates are relatively high. Two, the continued appreciation of the renminbi as a strong currency has intensified the impulse to arbitrage arbitrage. "Recently, some domestic and foreign research institutes predict that the US dollar may rebound strongly in the three quarter. If there is uncertainty in the unilateral appreciation of the RMB against the US dollar, the excessive growth of foreign exchange loans may increase financial risks. Macroeconomic regulation and control should not only prevent the economy from overheating, but also take account of financial stability.
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