Total social financing drops as liquidity tightened
By Feng Jianmin |
July 13, 2013, Saturday
|
Print Edition
Print Edition
CHINA'S total social financing dropped in June with banks lending more than expected but money supply growing slower after China stepped up risk management by tightening liquidity.
Chinese banks extended 860.5 billion yuan (US$140 billion) last month, the People's Bank of China said in a statement yesterday. It is higher than the market consensus of 800 billion yuan and lower than last year's 919.8 billion yuan.
M2, the broader measure of money supply, rose 14 percent, slower than the 15.2 percent and 15.8 percent economists had predicted for May, according to the statement.
Total social financing - an indicator of overall liquidity which includes funds raised from banks, bands, equity financing, foreign direct investment, and private sources - was 1 trillion yuan in June, 742.7 billion yuan less than the same month of last year.
The figures were released after Chinese banks went through the worst liquidity crunch in a decade last month as the central bank refrained from injecting funds to the financial system.
"Slower M2 growth showed that the previous measures taken by the central bank to control interbank liquidity are very effective," said Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd.
"The shrinking total social financing, and especially the larger-than-usual proportion of bank lending, indicated an effective control on shadow banking, which will benefit the economy," Zhou said.
Total social financing in the first half this year amounted to 10.15 trillion yuan, up more than 20 percent from the same period in 2012.
Chinese banks extended 860.5 billion yuan (US$140 billion) last month, the People's Bank of China said in a statement yesterday. It is higher than the market consensus of 800 billion yuan and lower than last year's 919.8 billion yuan.
M2, the broader measure of money supply, rose 14 percent, slower than the 15.2 percent and 15.8 percent economists had predicted for May, according to the statement.
Total social financing - an indicator of overall liquidity which includes funds raised from banks, bands, equity financing, foreign direct investment, and private sources - was 1 trillion yuan in June, 742.7 billion yuan less than the same month of last year.
The figures were released after Chinese banks went through the worst liquidity crunch in a decade last month as the central bank refrained from injecting funds to the financial system.
"Slower M2 growth showed that the previous measures taken by the central bank to control interbank liquidity are very effective," said Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd.
"The shrinking total social financing, and especially the larger-than-usual proportion of bank lending, indicated an effective control on shadow banking, which will benefit the economy," Zhou said.
Total social financing in the first half this year amounted to 10.15 trillion yuan, up more than 20 percent from the same period in 2012.
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