BEIJING, (Reuters) – China’s new yuan loan is expected to drop in April, after rebounding in March, as credit demand weakened. A Reuters poll revealed that this despite the fact that the central bank maintains policy accommodative support for the slowing economy.

Chinese economic growth has been affected by the race to end the rise of COVID-19 records. This led to full lockdowns in many Chinese cities and a partial lockdown of Shanghai, the main commercial center of China, in April.

Chinese banks were estimated to have given net new yuan loans of 1.52 trillionyuan ($226.32billion) to Chinese customers last month. That’s half of 3.13 trillionyuan that was issued in March according to the median estimate from 18 economists.

However, the new loans expected to be issued would exceed 1.47 trillion Yuan in the same month last year.

Analysts think that the anticipated fall in loans for April is due to lower demand from credit by businesses, seasonal factors and Chinese banks’ rush to lend more loan funds towards the end.

Analysts at Goldman Sachs (NYSE) stated in a note that “despite policy-easing efforts credit demand likely deteriorated further during the month”

In order to offset a slowdown in economic growth the central bank has reduced the amount of cash reserves banks are required to hold starting April 25. It is expected that more gradual easing actions will be taken.

China is going to take measures to help its economy in the face of rising risks from COVID-19 and conflicts in Ukraine, according to a high-ranking decision-making body within its ruling Communist Party.

China pledged that it would maintain a nominal growth in money supply and social finance growth of approximately the same level as this year’s economic growth.

The poll revealed that outstanding yuan loan balances were forecast to rise by 11.4% in April compared with a year ago, which was the same rate as March. The broad M2 money supply growth was 9.9% in April, compared to 9.7% in March.

China is maintaining the same quota of 3.65 trillion yuan for 2022 local government special bonds issuance, as it did last year.

An acceleration of government bond issuance might help to boost total social finance (TSF), which includes credit and liquidity.

Goldman Sachs predicts that the year-on-year increase in outstanding TSF will be 10.8%, compared to 10.6% in March.

TSF should fall to 2.15 trillion Yuan in April, from 4.65 trillion yuan March.

($1 = 6.7163 renminbi)