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UPDATE 1-China bankers see policy easing ahead -c.bank survey
December 18, 2012 / 4:46 AM / in 5 years

UPDATE 1-China bankers see policy easing ahead -c.bank survey

* Survey shows more bankers see easing in Q1 2013

* Business confidence up slightly in Q4 -c.bank survey

* Residents’ consumer inflation expectations rise (Adds details, background)

BEIJING, Dec 18 (Reuters) - China’s current monetary policy settings are appropriate according to bankers in the country, but a growing minority expect further easing to spur the economy, a quarterly survey by the People’s Bank of China published on Tuesday showed.

Some 75 percent of bankers who responded to the survey believed that the central bank’s policy stance was appropriate, up 2.5 percentage points from a survey in the third quarter.

The proportion of bankers expecting policy to ease in the first quarter of 2013 was 19.8 percent. In the previous quarterly survey, 5.9 percent of respondents had expected some easing in the fourth quarter of 2012, which the PBOC opted to do through open market operations rather than making further cuts to interest rates or banks’ reserve requirements.

The central bank cut interest rates in June and July and has lowered bank reserve requirement ratios (RRR) three times since late 2011, but it has since opted to pumping short-term cash into money markets to support bank lending.

Demand for bank loans increased, with an index measuring credit demand hitting 71.1 percent in the fourth quarter, up 4.3 percentage points from the previous quarter, according to the quarterly survey.

The survey also showed 41.7 percent of respondents expected consumer prices to rise in the first quarter of 2013, 4.7 percentage points higher than the previous survey.

Some 19.4 percent of respondents said they were more willing to spend in the fourth quarter, up 1.9 percentage points from the survey at the start of 2012, while 47.1 percent of them were more inclined to save, roughly unchanged.

The survey also found 29 percent of respondents expect home prices to rise in the first quarter of 2013, 11.3 percentage points higher than the earlier survey result, with 66.6 percent saying home prices were unacceptably high.

Business confidence rose to 60.4 percent, up 1.2 percentage points from the previous survey, the survey showed.

The central bank’s survey in Q4 also showed the export order index at 47.1 percent, down 0.4 percentage points from the previous quarter, while another index measuring corporate expectations on export orders slipped to 47.9 percent versus 49.5 percent in the previous quarter. (Reporting By Xiaoyi Shao, Hui Li and Kevin Yao; Editing by Simon Cameron-Moore)

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