SHANGHAI, May 13 (Reuters) - China's yuan slipped to a two-week low against the dollar as weak domestic credit data reinforced the need for more policy support while the threat of new U.S. tariffs on the world's second-biggest economy sapped confidence. New bank lending in China fell more than expected in April from the previous month while broad credit growth hit a record low, the central bank said on Saturday.

"The weak credit and money supply data, along with the recent reduction in the central bank's balance sheet, may indicate a potential requirement for the PBOC to further lower its policy rate," said Tommy Xie, Tommy Xie, head of Greater China research at OCBC Bank. "The odds is now rising for additional monetary policy easing to come in the near-term regardless of the Fed's rate cut expectations," said Becky Liu, head of China macro strategy, Standard Chartered. China's finance ministry said on Monday that it will kick off the long-awaited sales of long-term treasury bonds, starting on Friday. The sale will help fund stimulus spending at home as authorities continue efforts to bolster an uneven economic recovery. Some traders said sentiment also may have been affected by the new China tariffs on strategic sectors expected to be announced by the United States this week. The Chinese yuan has lost 1.9% of its value against the dollar this year, and remains vulnerable in the face of a shaky economic recovery as well as policy and geopolitical challenges.

Prior to the market's opening, the People's Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.103 per dollar, the weakest level since April 30. The spot yuan opened at 7.2274 per dollar and was changing hands at 7.2338 at midday, 68 pips weaker than the previous late session close and 1.84% away from the midpoint. The global dollar index rose to 105.327 from the previous close of 105.301. The offshore yuan was trading 42 pips weaker than the onshore spot at 7.238 per dollar. The immediate focus for market participants will be China's medium-term rate decision on Wednesday, with most expecting rates will be held unchanged.

Of bigger significance is a set of economic indicators, including retail sales and industrial output, due on Friday. The yuan market at 0332 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 7.103 7.1011 -0.03% Spot yuan 7.2338 7.227 -0.09% Divergence from 1.84% midpoint* Spot change YTD -1.88% Spot change since 2005 14.41% revaluation *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning.

OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 7.238 -0.06% * Offshore 7.0245 1.12% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Shanghai Newsroom Editing by Shri Navaratnam)