M2 Money Supply Growth Hits New Low in October

Growth in China’s M2 money supply continues to tap new lows as central government regulators forge ahead with their deleveraging campaign.

The latest official data indicates that China’s M2 money supply balance was 165.34 trillion yuan as of the end of October, for year-on-year growth of 8.8%, as well as a growth deceleration of 0.4 percentage points compared to the previous month, and 2.8 percentage points compared to the same period last year.

The M1 money supply balance was 52.6 trillion yuan, for year-on-year growth of 13%, as well as deceleration of 1 percentage point compared to the previous month and 10.9 percentage points compared to the previous year.

The M0 money balance was 6.82%, for year-on-year growth of 6.3%, and a net cash withdrawal of 151.8 billion yuan in October.

The lending balance for both the renminbi and foreign currencies was 123.89 trillion yuan at the end of October, for a year-on-year rise of 12.4%

The RMB loan balance was 118.42 trillion yuan, for year-on-year growth of 13%, and a growth deceleration of 0.1 percentage point compared to both the preceding month and the same period last year.

New RMB loans were  663.2 billion yuan, for a year-on-year increase of 11.9 billion yuan, of which household loans increased by 540.1 billion yuan, with short-term loans rising by 79.1 billion yuan and medium and long-term loans increased by 371 billion yuan.

Non-financial sectors and organs and organisation loans increased by 214.2 billion yuan, while short-term loans in this category fell by 11.3 billion yuan, while medium and long-term loans increased by 236.6 billion yuan.

As of the end of October the foreign currency loan balance was USD$822.8 billion, for a year-on-year increase of 2.8%.

China’s total yuan and foreign deposit deposit balance saw a year-on-year increase of 9.2% in October to reach 168.5 trillion yuan.

The RMB deposit balance saw a 9.1% year-on-year increase to reach 163.33 trillion yuan, for an acceleration in growth of 0.2 percentage points and 2.4 percentage points compared to the previous month and the same period last year.

Interbank market RMB transactions for October totalled 59.48 trillion yuan, including interbank loans, bond spot transactions and repo agreements, for a daily average of 3.5 trillion yuan, which marks a 14.1% increase compared to the same period last year.

Interbank loan daily transactions saw a year-on-year increase of 5.1%, while bond spot transactions saw daily transactions fall by 11.4%, and repo daily transactions rose by 21%.

The weighted average rate for interbank borrowing was 2.81% in October, for a decline of 0.1 percentage point compared to September, and an increase of 0.52 percentage points compared to the same period last year.

The weighted average repo rate was 2.91%, for a decline of 0.16 percentage points compared to September, and an increase of 0.56 percentage points compared to October 2016.

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