China's money supply growth slows down in October

The People's Bank of China, the country's central bank, said China's growth of money supply and bank loans slowed down slightly last month, while savings deposits went up at a faster pace year-on-year.

The broad money (M2), including money in circulation plus all deposits, was up to 24.37 trillion yuan (2.94 trillion US dollars) at the end of October, a rise of 13.5 percent year-on-year, but 0.4 percentage points lower than that at the end of September, the bank said in a statement posted on its website.

The narrow money supply (M1), or the cash in circulation plus the demand deposits of enterprises, rose to 9.08 trillion yuan (1.09 trillion US dollars), up 12.6 percent year-on-year, or 1.1 percentage points lower from the end of September.

The central bank said the slowdown in money supply was mainly attributed to higher growth in fiscal deposits and decrease of corporate deposits.

Cash in circulation (M0) stood at 2.01 trillion yuan (245.1 billion US dollars) at the end of October, up 10 percent year-on-year.

Net cash withdrawal from circulation amounted to 44.6 billion yuan (5.3 billion US dollars) in October, 39 billion yuan (4.7 billion US dollars) more than the same period of 2003. Net cash injection for the first 10 months was 33.2 billion yuan (4.04 billion US dollars), down by 64 billion yuan (7.8 billion US dollars) year-on-year.

The outstanding loans denominated in both local and foreign currencies in all financial institutions increased by 13.3 percent year-on-year to 18.48 trillion yuan (2.23 trillion US dollars) at the end of October, 0.4 percentage points lower than the end of the previous month.

The outstanding loans denominated in Renminbi, the local currency, reached 17.37 trillion yuan (2.1 trillion US dollars), also up 13.3 percent at the end of October, or down by 0.3 percentage points over the previous month, and 10 percentage points lower than the same period of last year.

The annualized month-on-month growth was equal to 12.3 percent after seasonally adjusted, according to the statement.

New Renminbi loans were 25.6 billion yuan (3.09 billion US dollars) last month, a drop of 33.1 billion yuan (4 billion US dollars) year-on-year.

Short-term loans dropped by 23.2 billion yuan (2.8 billion US dollars) over the previous month, or 65.4 billion yuan (7.97 billion US dollars) less than October of last year.

Negotiable bills financing decreased by 30.9 billion yuan (3.7 billion US dollars) in October, 22.4 billion yuan year-on-year, while medium and long-term loans grew by 83.9 billion yuan (10.2 billion US dollars), 200 million yuan (24 million US dollars) more than the same period of last year.

Outstanding deposits denominated in local currency reached 23.6 trillion yuan (2.87 trillion US dollars) at the end of end of October, up 15.9 percent year-on-year, or 0.1 percentage points more than the previous month.

Outstanding household deposits stood at 11.6 trillion yuan (1.41 trillion US dollars), up 14.4 percent, or the same as the previous month, and outstanding corporate deposits of 8.02 trillion yuan (978 billion US dollars), up 14.3 percent.

Outstanding deposits in both local and foreign currencies in all financial institutions (including foreign-funded ones) reached 24.96 trillion yuan (3.04 trillion US dollars) at the end of October, up 15.3 percent, or down by 5.9 percentage points than the growth rate for the same period of last year.

New local currency deposits amounted to 145.3 billion yuan (17.7 billion US dollars) in October, an increase of 25.4 billion yuan (3.09 billion US dollars) over the same period of last year. Of which, new corporate deposits were down by 30.7 billion yuan (3.74 billion US dollars), or a net drop of 39.8 billion yuan (4.85 billion US dollars) year-on-year.

The bank attributed slower increase in banking loans to the decrease of corporate deposits, and increasing corporate profitability to faster growth in fiscal deposits.

Renminbi saving deposits grew by 54.2 billion yuan (6.6 billion US dollars), 4.9 billion yuan (597 million US dollars) more than the increased sum for the same month of last year. It is the first year-on-year growth of increased saving deposits since February.

The bank said turnover of Renminbi transactions in the inter-bank market in October totaled 877.7 billion yuan (106.1 billion US dollars) with daily average volume at 48.8 billion yuan (5.95 billion US dollars), down by 13.2 percent over the previous month.

The interest rates in inter-bank market dropped slightly with the monthly-weighted average interest rates in inter-bank borrowing market averaged at 2.24 percent, 0.06 percentage points lower than the previous month.

Monthly-weighted average interest rates in pledged bond repurchase market stood at 2.16 percent, 0.04 percentage points lower from the previous month.

Renminbi exchange rate remained stable as it stood at 8.2765 yuan per US dollar at the end of October.