China’s M2 Money Supply Growth Accelerates to over 12% in January

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Growth in China’s broad M2 money supply accelerated to over 12% in January, while loan growth edged higher to more than 10% in year-on-year (YoY) terms, according to the latest round of data from the People’s Bank of China (PBOC).


1. Broad M2 money supply increases by 12.6%

At the end of January, broad money supply (M2) balance was 273.81 trillion yuan, for a YoY increase of 12.6%, and growth rate accelerations of 0.8 and 2.8 percentage points respectively compared to the end of the previous month and the same period last year.

The narrow money supply (M1) balance was 65.52 trillion yuan, for a YoY increase of 6.7%, and growth rate accelerations of 3 and 8.6 percentage points respectively compared to the end of the previous month and the same period last year.

The balance of money in circulation (M0) was 11.46 trillion yuan, for a YoY increase of 7.9%. The net cash injection for the month was 997.1 billion yuan.

2. Renminbi loans increase by 4.9 trillion yuan in January

At the end of January, the balance of domestic and foreign currency loans was 224.8 trillion yuan, for a YoY increase of 10.6%. At the end of the month, the balance of renminbi loans was 219.75 trillion yuan, for a YoY increase of 11.3%. This growth rate was 0.2 percentage points higher than the end of the previous month and 0.3 percentage points lower than the same period last year.

In January, renminbi loans increased by 4.9 trillion yuan, for an increase of 922.7 billion yuan compared to the figure for the same period last year.

Broken down by sector, household loans increased by 257.2 billion yuan, with short-term loans increasing by 34.1 billion yuan and medium and long-term loans increasing by 223.1 billion yuan.

Loans to enterprises (institutions) increased by 4.68 trillion yuan, with short-term loans increasing by 1.51 trillion yuan and medium and long-term loans increasing by 3.5 trillion yuan.

Bill financing decreased by 412.7 billion yuan, and loans of non-bank financial institutions decreased by 58.5 billion yuan.

As of the end of January, the balance of foreign currency loans was US$747.3 billion, for a YoY decrease of 19.7%. In January, foreign currency loans increased by US$5.8 billion, for a YoY decrease of US$12.3 billion.

3. RMB deposits increase by 6.87 trillion yuan in January

As of the end of January, the balance of domestic and foreign currency deposits was 271.39 trillion yuan, for a YoY increase of 11.9%. The balance of renminbi deposits was 265.39 trillion yuan, for a YoY increase of 12.4%, and growth rate accelerations of 1.1 and 3.2 percentage points compared to the end of the previous month and the same period last year respectively.

In January, renminbi deposits increased by 6.87 trillion yuan, for an increase of 3.05 trillion yuan compared to the same period last year.

Household deposits increased by 6.2 trillion yuan, while non-financial enterprise deposits decreased by 715.5 billion yuan, fiscal deposits increased by 682.8 billion yuan, and non-bank financial institution deposits increased by 1.01 trillion yuan.

As of the end of January, the balance of foreign currency deposits was US$887.8 billion, for a YoY decrease of 13.3%. Foreign currency deposits increased by US$33.9 billion in January, for an increase of US$6.7 billion compared to the same period last year.

4. Monthly weighted average interest rate for interbank loans at 1.44%

In January, the interbank renminbi market had a total turnover of 123.28 trillion yuan via loans, cash bonds and repos, as well as an average daily turnover of 6.85 trillion yuan, for a YoY increase of 8.6%.

Average daily interbank loan transactions increased by 7.3% YoY, while average daily spot bond transactions decreased 10.8%, and average daily pledged repo transactions increased 12.9%.

The weighted average interest rate for interbank loans in January was 1.44%, 0.18 percentage points higher than the previous month, albeit 0.57 percentage points lower than the same period last year.

The weighted average interest rate for pledged repo was 1.56%, 0.15 percentage points higher than the previous month, yet 0.48 percentage points lower than the same period last year.