China’s central bank has reported an increase in new bank loans, reaching an all-time high in January, despite the country’s economic recovery being weaker than expected.

The People’s Bank of China (PBOC) reported that banks extended 4.92 trillion yuan ($683.7 billion) in new yuan loans in January, setting a record and exceeding analysts’ predictions.

This marks a significant increase from the previous high of 4.9 trillion yuan in December 2022. The bank’s decision to maintain price stability and policy flexibility is expected to boost domestic demand.

The central bank has also reduced the reserve requirement ratio for banks by 50 basis points, releasing 1 trillion yuan in long-term liquidity.

Corporate loans increased to 3.86 trillion yuan, while household loans rose to 980.1 billion yuan in January.

The growth rate of the broad M2 money supply in January 2022 was 8.7%, the lowest since November 2021.

The total social finance (TSF) outstanding growth rate was 9.5% in January.

The finance ministry has pledged to keep up fiscal expansion this year, with public spending being the primary means of stimulating growth.