M2 slows on steps to curtail lending
By Zhang Fengming |
July 12, 2010, Monday
|
Print Edition
Print Edition
CHINA'S new yuan credit and money supply slowed in June as the government took steps to curb lending growth, while the central bank said there will be no change to the "appropriately loose" monetary policy in the second half of the year.
Banks in China extended 603.4 billion yuan (US$90.3 billion) of new yuan loans last month, down from May's 639.4 billion yuan, the People's Bank of China said on its website yesterday. That's within the median forecast of 600 billion yuan in a Bloomberg survey.
M2, the broadest measure of money supply, grew 18.5 percent from a year earlier in June, down from a growth of 21 percent in May. The median forecast among economists was 18.8 percent.
"We don't expect the monetary policy stance to change in the second half," said Lu Zhengwei, an Industrial Bank senior economist. "Some fine-tuning is likely due to the strong curbs on lending growth in the first half."
China will maintain its "appropriately loose" monetary policy in the second half, the PBOC said.
The central bank said last Thursday that growth in money and loans in the first half of this year was reasonable and liquidity in the banking system "basically appropriate," suggesting more policy measures, including raising interest rates or banks' reserve requirements, are unlikely in the short term.
Tightening moves unveiled earlier this year were aimed to cooling the overheated housing market. Economists are now scaling back their forecasts on interest rates due to a slowdown in domestic economic growth and uncertainties over external demand.
Domestic monetary growth has slowed since November as bank lending has expanded more slowly in line with a tightening of monetary policy. China has set money supply to grow 17 percent this year and new credit of 7.5 trillion yuan.
In the first half of the year, banks lent 4.63 trillion yuan of new yuan credit, down from 7.4 trillion yuan in the same period in 2009. They lent a record 9.6 trillion yuan of new loans in 2009.
Banks in China extended 603.4 billion yuan (US$90.3 billion) of new yuan loans last month, down from May's 639.4 billion yuan, the People's Bank of China said on its website yesterday. That's within the median forecast of 600 billion yuan in a Bloomberg survey.
M2, the broadest measure of money supply, grew 18.5 percent from a year earlier in June, down from a growth of 21 percent in May. The median forecast among economists was 18.8 percent.
"We don't expect the monetary policy stance to change in the second half," said Lu Zhengwei, an Industrial Bank senior economist. "Some fine-tuning is likely due to the strong curbs on lending growth in the first half."
China will maintain its "appropriately loose" monetary policy in the second half, the PBOC said.
The central bank said last Thursday that growth in money and loans in the first half of this year was reasonable and liquidity in the banking system "basically appropriate," suggesting more policy measures, including raising interest rates or banks' reserve requirements, are unlikely in the short term.
Tightening moves unveiled earlier this year were aimed to cooling the overheated housing market. Economists are now scaling back their forecasts on interest rates due to a slowdown in domestic economic growth and uncertainties over external demand.
Domestic monetary growth has slowed since November as bank lending has expanded more slowly in line with a tightening of monetary policy. China has set money supply to grow 17 percent this year and new credit of 7.5 trillion yuan.
In the first half of the year, banks lent 4.63 trillion yuan of new yuan credit, down from 7.4 trillion yuan in the same period in 2009. They lent a record 9.6 trillion yuan of new loans in 2009.
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