The People’s Bank of China (PBOC) has just released its official raft of financial data for the first half of 2020, pointing to a significant decline in M1 money supply growth during the period.
Preliminary data released by PBOC on 10 July indicates that the increase in total social financing (TSF) in the first half of 2020 was 20.83 trillion yuan, 6.22 trillion yuan ahead of the figure for the same period last year.
The TSF increase in June alone was 3.43 trillion yuan, 809.9 billion yuan more than the figure for June 2019.
As of the end of June outstanding TSF was 271.8 trillion yuan for a YoY rise of 12.8%, 1.6 percentage points ahead of the figure for the same period last year.
As of the end of June the broad M2 money supply balance was 213.49 trillion yuan, for a YoY rise of 11.1%.
This increase was on par with the reading for the end of the previous month, and 2.6 percentage points ahead of the same period last year.
The narrow M1 money supply balance was 60.43 trillion yuan as of the end of June, for a YoY rise of 6.5%, and a deceleration of 0.3 percentage points compared to the previous month, as well as 2.1 percentage points compared to the end of June last year.
As of the end of June the domestic and foreign currency loan balance was 171.32 trillion yuan, for a YoY rise of 13%.
The renminbi loan balance was 165.2 trillion yuan for a YoY rise of 13.2%. Growth was on par with the end of the preceding month, and 0.2 percentage points higher than the same period last year.
In the first half renminbi loans increased 12.09 trillion yuan, 2.42 trillion yuan ahead of the figure for the same period last year.
The foreign currency loan balance was USD$864.3 billion at the end of June, for a YoY rise of 5.6%.
Foreign currency loans increased $77.4 billion in the first half, $53.6 billion ahead of the reading for the same period last year.
As of the end of June the domestic and foreign currency deposit balance was 212.99 trillion yuan, for a YoY rise of 10.5%.
The renminbi deposit balance was 207.48 trillion yuan, for a YoY rise of 10.6%, and an acceleration of 0.2 percentage points compared to the previous month, as well as 2.2 percentage points compared to the same period last year.
In the first half of 2020 renminbi deposits increased 14.55 trillion yuan, 4.5 trillion yuan ahead of the same period last year.
Foreign currency deposits increased $778.5 billion, for a YoY rise of 2.4%.
PBOC said that at present the money supply is ample, and that there has been a marked expansion in financial support for the real economy in the wake of the COVID-19 pandemic.
Shifts in China’s monetary and financial system have undergone structural changes, with M1 growth in June declining compared to the preceding month and the deposits of citizens and businesses increasing.
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