(Yicai Global) April 12 -- The scale of new Chinese yuan loans and social financing has exceeded expectations as China's economy recovers further, making it unlikely that the country’s central bank will lower interest rates and the reserve requirement ratio this quarter, according to analysts.

New yuan loans jumped 19.3 percent to CNY3.89 trillion (USD564.9 billion) in March from a year earlier, data from the People’s Bank of China showed yesterday. Social financing rose 13.2 percent to CNY5.38 trillion. That compares with predictions for CNY3.07 trillion and CNY4.31 trillion respectively made by chief economists surveyed by Yicai Global.

The reserve requirement ratio, or the amount of cash banks must hold in reserve, was cut last month and China's economy is gaining momentum, so a reduction this quarter is not likely, Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, told Yicai Global.

The PBOC may replenish mid- and long-term liquidity in the banking system to support lending by adding more medium-term lending facilities, Wang noted.

The possibility of a policy interest rate cut is low, Wang said, but to guide the real estate sector to a soft landing as soon as possible, the PBOC may trim the loan prime rate, the benchmark lending rate, on loans of more than five years by 0.1 point.

According to market analysis, the availability of credit in the first three months of this year was high and exceeded predictions. The strong growth momentum in economic data, especially for credit, will likely continue amid the ongoing economic rebound and the increasing demand for finance.

China's March economic data was generally good, with M2, a broad measure of money supply that covers cash in circulation and all deposits, continuing to grow at a fast rate, and the scale of yuan loans and social financing scale rising more than expected, said Dong Ximiao, chief researcher at Merchants Union Consumer Finance.

With government policies aimed at stabilizing growth and promoting development taking effect, market confidence has been boosted significantly, the pace of demand for finance has quickened, and the economic recovery is more stable, Dong noted.

M2 had jumped 12.7 percent by the end of last month from a year ago, but was 0.2 point down on February, while M1, an estimate of cash and checking account deposits, rose 5.1 percent annually growth and fell 0.7 point on a monthly basis, according to the PBOC. The M2-M1 gap widened by 0.5 point to 7.6 points.

Firms are more active, and last year's benchmark in the same period was stable, but the growth rate of M1 still slowed because the property sector is adjusting and developers face inadequate deposit demand, Wang said. The sector has recently picked up, but the growth rate of M1 may remain low for a while, Wang added.

Editor: Martin Kadiev