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BEIJING (Reuters) -New bank lending in China tumbled in April from the previous month as the COVID-19 pandemic jolted the economy and weakened credit demand, central bank data showed on Friday, after it pledged to step up support to ward off a sharper slowdown.

FILE PHOTO: People wearing face masks walk past a bank, where the Chinese national flag flies at half-mast in Beijing as China holds a national mourning for those who died of the coronavirus disease (COVID-19), on the Qingming tomb-sweeping festival, April 4, 2020. REUTERS/Tingshu Wang

Chinese banks extended 645.4 billion yuan ($95.14 billion) in new yuan loans in April, down about 80% from March and falling short of analyst expectations, according to the People’s Bank of China data.

Analysts polled by Reuters had predicted new yuan loans would fall to 1.52 trillion yuan in April from 3.13 trillion yuan the previous month and against 1.47 trillion yuan a year earlier.

“Lending was much weaker than expected last month as lockdowns weighed on credit demand. This should nudge the PBOC to announce further easing measures soon,” Capital Economics said in a note.

“But the central bank continues to signal a relatively restrained approach.”

The central said the sharp slowdown in April new loans reflected the impact of the COVID on the real economy.

“Enterprises, especially small, medium-sized and micro enterprises, had more operating difficulties, and demand for effective financing decreased significantly,” it said.

Full or partial lockdowns to stop the spread of COVID in dozens of Chinese cities, including a city-wide shutdown in the commercial hub of Shanghai, have hit the economy hard.

To cushion a sharp slowdown in economic growth, the central bank cut the amount of cash that banks must hold as reserves from April 25, and more modest easing steps are expected.

The central bank said on Monday it would step up support for the slowing economy, while closely watching domestic inflation and monitoring policy adjustments by developed economies.

Broad M2 money supply grew 10.5% from a year earlier, central bank data showed, above estimates of 9.9% forecast in the Reuters poll. M2 grew 9.7% in March from a year ago.

Outstanding yuan loans grew 10.9% in April from a year earlier compared with 11.4% growth in March. Analysts had expected 11.4% growth.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 10.2% in April from a year earlier and from 10.6% in March.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

In April, TSF fell to 910.2 billion yuan from 4.65 trillion yuan in March. Analysts polled by Reuters had expected April TSF of 2.15 trillion yuan.

($1 = 6.7835 Chinese yuan renminbi)

Reporting by Judy Hua and Kevin Yao; Editing by Simon Cameron-Moore, Robert Birsel