Chinese banks issued net new yuan loans of nearly 1.6 trillion yuan ($234.4 billion) in January, the Economic Information Daily reported on Monday, pointing to a much slower pace of lending in the last 10 days of the month.

The newspaper, which is published by the official Xinhua News Agency, did not give a source for its information.

The authorities ordered banks to rein in their lending after a burst of credit at the start of the month and reinforced their message by announcing a half-point increase in reserve requirements on January 12.

Banks lent 1.1 trillion yuan in the first half of January, according to bankers familiar with the central bank; by January 19, the total had reached 1.45 trillion yuan, local media reported.

If the figure given by the Economic Information Daily is confirmed when the People's Bank of China releases official data next week, it will mean that net lending last month was actually lower than a year earlier.

In January 2009, when banks were being encouraged to lend freely to support the government's economic recovery programme, net new local-currency lending came to 1.62 trillion yuan.

The paper also said that China Construction Bank was aiming to lend 750 billion yuan, and Bank of China 600 billion yuan, over the course of 2010.

China's banking regulator has said the target for full-year lending will be about 7.5 trillion yuan, down from 9.6 trillion yuan in 2009

The central bank is unlikely to raise interest rates before the second half of this year, the newspaper added.

An interest rate increase is not necessarily the best option. The central bank will raise rates only once this year, if at all, as quantitative and administrative measures will be sufficient to keep the rhythm of lending well controlled, the newspaper said.

(Reporting by Aileen Wang and Alan Wheatley; Editing by Ken Wills)

China China Construction Bank