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China's new yuan loans rise, M2 growth continues to slow
Last Updated: 2017-09-18 08:04 | Xinhua
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Chinese banks extended 1.09 trillion yuan (about 167.7 billion U.S. dollars) of new loans in August, well above market forecasts, buoyed by demand from home buyers and companies.

New yuan-denominated loans in August expanded from 825.5 billion yuan in July and exceeded market expectation of 950 billion yuan.

By the end of August, outstanding yuan loans grew 13.2 percent from a year earlier, with the increase unchanged from that at the end of July, the People's Bank of China said on its website Friday.

E Yongjian, an analyst with Bank of Communications, said the faster-than-expected new loan increase in August reflected enterprises' increasing demand for credit amid stable economic growth, while recovering housing sales fueled mortgage loans.

Rising new yuan loans will provide strong support for the real economy, and create room for policy makers to continue the financial supervision tightening, according to a research note by Industrial Securities Co. Ltd.

However, Wang Yang, an economist at the State Council's Development Research Center, said short-term economic growth will fluctuate as the deleveraging, tighter financial supervision, excess capacity reduction and property market regulation may weigh on activities.

At the end of August, M2, a broad measure of money supply that covers cash in circulation and all deposits, rose 8.9 percent from a year earlier, slowing down from 9.2 percent recorded a month ago.

Decelerating for the seventh straight month, the M2 growth rate in August marked a new low that also stayed well below the government's targeted M2 increase of around 12 percent this year.

The central bank has said the slower M2 growth is likely to become a "new normal" along with the country's deleveraging and stronger financial support for the real economy.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, rose 14 percent year on year, down from the 15.3 percent rise registered at the end of July.

The newly added total social financing also surpassed market forecasts, reaching 1.48 trillion yuan last month and up 18.6 billion yuan from a year ago.

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