The People’s Bank of China just published a new set of monetary statistics.
M2 money supply increased 15.7% in February compared to a year ago, vs. 17.2% in January. M1 money supply increased 14.5% compared to a year ago.
New loans in Chinese Yuan amounted to RMB 535.6 billion, and RMB loan growth amounted to 17.7%
Source: People’s Bank of China
As mentioned before, China will abandon the loan target going forward and focus on total national financing. Thus at this point, M2 will be the main focus before the total national financing measures are fully deployed. For the time being, the money supply growth has been normalised after the period of high growth after the financial crisis. M2 growth has been back to the pre-crisis average level. At the moment, it is in-line with the 16% M2 growth target. But to contain inflation, don’t be surprised even more tightening. And indeed, I still believe this growth rate to be too fast.
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This article originally appeared here: China: Monetary Statistics for February 2011
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