According to People's Bank of China (PBC), as shown in statistics, the over-fast growth of money and credits got back under control and the reasonable needs of the social development were met in 2004. These must be attributed to the PBC's implementation and improvement of the macro-control, persistence to the sound monetary policy, multiple monetary policy tools, moderate adjustment of the quantities in time as well as the differentiating policy to optimize the credit structure. Overall, marked achievement has been made thanks to monetary policy measures of macro-control.

Growth rate of money back to reasonable level

At the end of last December, broad money (M2) stood at RMB25.3 trillion yuan, up 14.6 percent year-on-year, five percentage points lower than the previous year; narrow money (M1) 9.6 trillion yuan, up 13.6 percent; money in circulation (M0) 2.1 trillion yuan, up 8.7 percent. Totally 172.2 billion yuan of net cash was injected into circulation, 74.6 billion less than the previous year. Generally speaking, broad money growth has returned to a reasonable rate, which was compatible with the economic growth.

Financial institutions see steady growth in deposits and strong payment capability

At the end of last December, the savings of Renminbi and foreign currencies stood at 25.3 trillion yuan with a year-on-year growth of 15.3 percent; renminbi savings 24 trillion yuan, up 16 percent or 3.3 trillion yuan. In terms of depositor, the savings of residents increased 1.59 trillion yuan, 964.1 billion yuan in fixed account and 628.9 billion in saving account. Residents' deposits turned more stable. The deposits of non-financial companies increased 1.63 trillion yuan and fiscal deposits increased 56.4 billion yuan.

The foreign exchange in financial institutions was 153 billion US dollars, three percent more than the previous year. Throughout 2004, the foreign exchange savings increased 4.4 billion US dollars, which was six billion US dollars more than in 2003.

Till the end of December, the excess reserve rate among all the financial institutions was a relative high of 5.25 percent, which meant a strong payment capacity.

Moderate increase in loans generally meets sectors' demand for capital

Till the end of December, the lending in domestic and foreign currencies in all the financial institutions totaled 18.9 trillion yuan, up 14.4 percent year-on-year; that in renminbi 17.7 trillion yuan, up 14.5 percent or 2.26 trillion yuan. In terms of loaner, residents borrowed 592.5 billion yuan more, in which 432.7 billion yuan for consumption and 159.8 billion for business. In the increased consumer loans, mid-and-short-term loans increased 17.3 trillion while mid-and-long-term loan increased 415.4 trillion; in the increased, 139.9 billion yuan was of short term and 19.9 billion of medium and long term. The amount borrowed by non-financial sectors etc. grew 1.67 trillion yuan, in which 491.9 billion of short term, 935 billion of medium and long term plus 202.6 billion in notes financing.

Foreign exchange loaned by financial institutions stood at 135.4 billion US dollars, increasing 12.5 percent on comparable basis, a rate 14 percentage points higher than the same period of the previous year. 17.1 billion US dollars was newly added, 11.6 billion less than that of the same period in the previous year.

On the whole, all the loans witnessed moderate growth, which generally met the capital need of non-financial sectors.

Inter-bank market interest rates stable

Throughout 2004, the interest rates generally remained stable except sometimes relatively high as affected by Spring Festival in January, by PBC??s adjustment of the legal deposit-reserve ratio. The monthly weighted average rate in inter-bank lending market was 2.07 percent, down 0.1 percentage point year-on-year; that of treasuary bonds repurchase 1.88 percent, down 0.29 percentage point. The market interest rates remained basically stable.

Big growth seen in foreign exchange reserve, exchange rate of Renminbi maintain stable

China's foreign exchange reserve was 609.9 billion US dollars at the end of 2004, up 51.3 percent year-on-year, a growth rate 10.5 percentage points higher than the previous year. 206.7 billion US dollars was added, 89.9 billion more than in 2003. The exchange rate of Renminbi was basically the same as in 2003 at 8.2765 yuan per US dollar.

By People's Daily Online