China records higher new yuan loans, slower M2 growth for H1

Source:Xinhua Published: 2018/7/13 21:23:21

China's new yuan-denominated loans expanded to 9.03 trillion yuan (about 1.35 trillion US dollars) in the first six months of this year, 1.06 trillion yuan more than the same period in 2017, central bank data showed Friday.

By the end of June, outstanding yuan loans had grown 12.7 percent from a year earlier to 129.15 trillion yuan, the People's Bank of China, the central bank, said in a statement.

In June alone, Chinese banks extended 1.84 trillion yuan in new yuan loans, up from 1.15 trillion yuan in May and 1.18 trillion yuan in April.

The M2, a broad measure of money supply that covers cash in circulation and all deposits, grew 8 percent year on year by the end of June, down from an 8.3-percent rise registered a month earlier.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, rose 6.6 percent year-on-year at the end of June.

Total social finance, a broad measure of funds that non-financial firms and households receive from the financial system, increased by 9.1 trillion yuan in H1, 2.03 trillion yuan less than a year earlier.

Despite a slower expansion in total social financing, bank credit has flown into the real economy at a faster pace, according to the central bank.

New yuan-denominated loans issued to the real economy sector increased 8.76 trillion yuan in the first half, 554.8 billion yuan higher than the growth in the same period of 2017.

This has accounted for 96.3 percent of the total social financing increase, up 22.5 percentage points from a year ago.

The central bank in late June announced the third reserve requirement ratio cut this year to boost funding for small and micro firms as well as support the debt-to-equity swap program.

Chinese banks extended a record 13.5 trillion yuan in new loans last year, up from 12.6 trillion yuan in 2016.

The government targeted annual GDP growth of around 6.5 percent for 2018 and planned to maintain moderate growth in M2 while ensuring a reasonable and stable level of liquidity.


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