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China Money August 2021

China: Credit growth eases in August

In August, Chinese banks distributed CNY 1.2 trillion (roughly USD 190 billion) in new yuan loans, up from July’s 1.1 trillion figure.

Annual growth in M2 money supply dipped from 8.3% in July to 8.2% in August, while annual growth in the stock of total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—was down from 10.7% to 10.3%. Softer credit data in August came despite the PBOC cutting the reserve requirement ratio by 0.5 percentage points in July, and suggests the authorities are keen to maintain a prudent stance.

Most of our panelists see the Bank’s key policy interest rates remaining unchanged through year-end.

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