M2 Falls in July
M2 fell 0.14 percent in July, reducing the 12-month growth rate to 9.2 percent.
The 3-month annualized rate of M2 growth rose to 8.4 percent. The downtrend is clear.
“This shows that banks are giving more support to the real economy as loans go back to the normal channel – in line with the direction of financial regulations”, said Wen Bin, senior analyst at Minsheng Bank in Beijing.
July lending is traditionally weak but last month’s level was still 49 billion yuan higher than the average of July figures between 2014 and 2016, according to Reuters calculations based on central bank data.
Broad M2 money supply (M2) in July grew 9.2 percent from a year earlier – the slowest since records began in 1996, central bank data showed, missing forecasts for an expansion of 9.4 percent and compared with June’s 9.4 percent.
China’s central bank has said that the slowing M2 growth could be a “new normal” due to the stepped-up crackdown on risky shadow lending activities.
Household loans, mostly mortgages, fell to 561.6 billion yuan in July from 738.4 billion yuan in June, according to Reuters calculations based on the central bank’s data.
Household loans accounted for 68 percent of total new loans last month, up from 48 percent in June.
An improvement from last year’s more than 100 percent.