June 26 (Reuters) - China's central bank instructed some commercial banks to increase their lending this month, people familiar with the matter said on Friday, the latest sign that demand for credit remains weak as the economy grapples with sluggish domestic consumption.
The informal guidance by the People's Bank of China (PBOC) comes after similar interventions in the previous two months. While loan growth in the world's second-largest economy has stalled, policymakers have publicly played down concerns.
The people declined to be named because they were not authorised to speak to media on the subject.
Official figures suggest the regulatory nudges have had limited effect so far. New bank lending rose less than expected in May after contracting the previous month, as a prolonged property downturn continued to hit households.
China's monthly credit data is closely watched as a barometer of activity in the economy.
The PBOC didn't immediately reply to a request for comments from Reuters.
China's economy is showing increasingly uneven momentum: retail sales fell for the first time in more than three years last month and investment has slumped.
The quiet push to boost lending appears at odds with recent remarks by PBOC Governor Pan Gongsheng, who has argued that the slowdown in credit growth reflects a deliberate, structural transition rather than a cause for concern.
Bank lending as a share of total financing has been declining in recent years while bond and equity financing have risen steadily, Pan said last week. This structural change reflects the "profound economic restructuring and a shift in growth engines" underway, he said.
Pan said "it is difficult and unnecessary" for credit growth to maintain its previous pace.
Reporting by Reuters staff; Editing by David Dolan
Source: Reuters