China’s credit growth surged unexpectedly to a record pace in January, strengthening production in the real economy and easing overall downward pressure, People’s Bank of China, the country’s central bank, said on Feb 15.

Bank lending in domestic currency increased by 3.23 trillion yuan ($476.8 billion) last month, the fastest single-month growth since the figure was first tracked in 1992. It increased by 2.9 trillion yuan in January 2018, the bank said.

Total social financing, a broader measure comprising all money the real economy receives from the financial sector, including off-balance-sheet financing activities, rose by 4.64 trillion yuan in January, which was also the fastest monthly growth ever, according to the central bank.

The month’s rapid credit growth was a result of a series of precautionary measures to ease the negative effects of slowing domestic demand and external headwinds, according to Sun Guofeng, head of the bank’s monetary policy department, at a news conference.

“The increased bank lending could match the real economy’s needs,” Sun said, adding that it doesn’t mean an aggressive easing of monetary policy.

The monetary authority has rolled out a series of policies in recent months to ensure adequate liquidity in the financial sector and accelerated loan issuance to companies. The measures include a new lending facility, called the targeted medium-term lending facility, which was introduced in December to encourage commercial banks to increase lending to small and private firms.

The central bank further cut the required reserve ratio for financial institutions by 1 percentage point in January and injected another 800 billion yuan of capital into the market. That followed four reserve ratio cuts last year.

Supported by the liquidity, the average interest rate in financial markets had already declined by January, which actually provided much cheaper funding to commercial banks and borrowers in the corporate sector, Sun said.

Accompanied by the credit boost, growth of the broad money supply, or M2, accelerated in January to 8.4 percent from 8.1 percent at the end of December, the central bank said. Government bond issuance, meanwhile, has also picked up since the start of this year.

“It’s hard to say that China entered a new cycle of credit expansion,” said Zhang Ming, chief economist at Ping An Securities. “For the whole year, the overall financing growth and money supply is expected to stabilize.”

Fast credit expansion means higher pressure on companies to repay debt and interest, and the space for sustainable credit growth is limited, given the current leverage level. Total outstanding debt has exceeded 250 percent of GDP, Zhang said.

The good news is that credit has been channeled effectively into the production sector, such as manufacturing and high-tech, and the healthier credit structure can support the overall economic restructuring reform, said Ruan Jianhong, head of the central bank’s statistics and analysis department.