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 The central bank is trying to keep liquidity flush to support the
economy and cushion the pain from structural reforms, but officials
have cautioned against excessive loosening that could increase
downward pressure on the yuan.
Economists polled by Reuters had expected new loans to fall to 1.2
trillion yuan last month from January's record of 2.51 trillion.
Some analysts believe the central bank has used its "window
guidance" to try and slow the pace of banks' lending.
"The authorities put a brake on the credit growth, due to concerns
over the overheating property market and rising CPI inflation," said
Zhou Hao, senior emerging markets economist at Commerzbank in
Singapore.
"We believe that today's number only reflects the administrative
control measures, rather than any change in the monetary policy
stance."
Zhou expects credit growth to pick up in March, in line with rising
mortgage loans and a further expansion in banks' balance sheet as
the government steps up fiscal spending.
The central bank said the broad M2 money supply measure (M2) grew at
13.3 percent from a year earlier, missing forecasts of 13.8 percent
and slowing from 14 percent in January.
Outstanding yuan loans grew at 14.7 percent by month-end on an
annual basis.
Analysts polled by Reuters had expected outstanding loans to rise by
15.2 percent, and predicted the money supply would rise by 13.8
percent.
The central bank aims for annual M2 growth of around 13 percent this
year, pointing to further policy easing during a painful economic
restructuring that could see millions of workers losing jobs.
Total social financing, another important indicator of China's
credit expansion, fell sharply to 780.2 billion yuan in February
from 3.42 trillion in January.
Chinese banks' upstanding foreign-currency deposits rose to $655.2
billion at the end of February from $646.9 billion at the end of
January, central bank data showed.
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FURTHER POLICY EASING EYED
The People's Bank of China (PBOC) cut bank reserve ratio
requirements (RRR) on February 29 in its latest effort to boost
growth, releasing an estimated $100 billion of capital for lending.
Analysts expect the PBOC, which has cut interest rates six times
since November 2014 and the RRR - the proportion of deposits that
banks must park at the central bank as reserves - several times, to
ease policy further in the coming months.
Commerzbank's Zhou expected the PBOC to cut the RRR by another 100
to 150 basis points this year, and cut interest rates by 25 basis
points.
The government has set a growth target of 6.5 percent to 7 percent
for this year, as a spate of soft data points to further weakness at
the start of the year and Beijing struggles to cushion the slowdown.
The world's second-largest economy grew 6.9 percent in 2015, its
weakest pace in a quarter of a century, as activity was weighed down
by sluggish demand, massive overcapacity in key industrial sectors,
cooling investment and a weak property market.
Even with more rate cuts, economists see growth cooling further to
6.5 percent this year, and some market watchers believe real growth
levels may already be much weaker.
($1=6.5127 Chinese yuan)
(Reporting Kevin Yao and Nathaniel Taplin; Editing by Sam Holmes and
Clarence Fernandez)
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