The People’s Banks of China has published the latest set of monetary statistics for March 2012.
M2 Money supply grew by 13.4% yoy, up from 13.0% yoy in February, accelerating for two consecutive months, and was above market consensus of 13.0%. M1 money supply growth increased by 4.4% yoy, below consensus.
New Chinese yuan loans increased by RMB1.01 trillion, well above consensus of RMB797.5 billion. Chinese yuan loans outstanding amounted to RMB57.25 trillion. Total net new loans for the first quarter of 2012 amounted to RMB2.46 trillion. Meanwhile, total Chinese yuan deposits increased to RMB84.69 trillion:
The foreign reserves of China reversed their quarterly loss of the 4th quarter of 2011 climbing to US$3.305 trillion, up from US$3.181 trillion at the end of last year. However, the year-on-year growth of the foreign reserve decreased to 8.55%, the lowest since 2001:
The data shows that monetary conditions could have slightly improved in the first quarter of 2012, more notably in March as loan growth picked up from the anaemic numbers we saw in the first two months. The increase in foreign exchange reserves and the end of the capital outflow which happened in a large scale in the last quarter of 2011 contributed. This may also help explain why there has not been more easing, as the incoming data are simply not bad enough to warrant easing at this point.