May new loans 1.36 trln yuan vs forecast 1.6 trln yuan
May M2 money supply 11.6 yy, vs forecast of 12.1
May TSF 1.56 trln yuan, vs forecast 2 trln yuan
C.bank vows to enhance countercyclical policy adjustments

BEIJING, June 13 Reuters China39;s new bank loans picked up in May from the previous month, as the central bank kept policy accommodative to support the economy, but signs of slowing momentum have raised expectations that more stimulus may be needed to sustain the recovery.

The weakerthanexpected credit data could strengthen the case for policymakers to roll out more support steps, including a cut in the benchmark lending rate this month, analysts said, amid deflationary risks and mounting local government debt.

New bank lending rose to 1.36 trillion yuan 190.18 billion in May, data from the People39;s Bank of China PBOC showed on Tuesday, up from April but missed analysts39; estimates.

Economists polled by Reuters had expected new yuan loans would jump to 1.6 trillion yuan last month, versus 718.8 billion yuan in April and against 1.89 trillion yuan a year earlier.

The credit growth is weak, which is not surprising as other economic indicators such as PMI and exports also sent consistent signals, Zhiwei Zhang, chief economist at Pinpoint Asset Management, said in a note.

This explains why the PBOC cut the reverse repo rate this morning. It is a small step in the right direction. I expect more policy actions to follow in coming weeks.

China39;s central…