The People’s Bank of China yeste rday published the latest monetary statistics for August 2012 after publishing the aggregate financing numbers earlier.
M2 money supply increased by 13.5% compared with a year ago, down from 13.9% yoy in July, and worse than expected growth of 14%. M1 money supply increased by 4.5%, less than 4.7% yoy as expected. Currency in circulation increased by 8.7%.
New loans increased by RMB703.9 billion, which is above expectations of RMB600 billion. Breaking down the new loans, loans to households amounted to RMB282.5 billion, while loans to non-financial corporations amounted to RMB421.1 billion. Breaking down the corporate loans, short-term loans amounted to RMB150.1 billion, bill financing at RMB131.4 billion, while medium- and long-term loans amounted to RMB120.3 billion. New loans remain dominated by short-term loans and bill financing, without much improvement.
Meanwhile, deposits increased by about RMB504.4 billion, reversing the loss in July.
The new loan figure is a pleasant surprise but the monetary statistics for the month does not contain any other bright spot. The fall in money supply growth came in as a surprise, and is not good news.