RMB 7 - 7.5 Trillion

Chinese banks are expected to extend new loans between RMB 7 trillion (about US $1.08 trillion) and 7.5 trillion throughout the year of 2011, compared with last year's RMB 7.95 trillion, confirmed a report by the Financial Research Center of the Bank of Communications. The center called this growth "steady but controllable" and attributed it to possible hikes in 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 available for loans. The center also said the possibility is low that further interest rate increases will be announced in the second half of this year due to official fears over accelerated capital inflow, tighter financing for small and medium-sized enterprises and a possible economic slowdown.