Original title: August M1 and M2 growth rates both fell, and corporate credit demand shows signs of stabilization
On September 10, the Central Bank released August financial statistics and social financing scale data.
At the end of August, narrow money (M1) increased by 4.2% year-on-year, a 19-month low; broad money (M2) increased by 8.2% year-on-year, down 0.1 percentage point from the previous month. At the same time, social finance continued to shrink. At the end of August, the stock of social financing was 305.28 trillion yuan, a year-on-year increase of 10.3%; the increase in social financing was 2.96 trillion yuan, 629.5 billion yuan less than the same period last year.
Wen Bin, chief researcher of Minsheng Bank, said that overall, the growth rate of currency and credit expansion has slowed down, while the demand for effective financing has weakened, and it is necessary to do a good job of cross-cyclical adjustment of macroeconomic policies. Intensify efforts to boost domestic demand, stabilize market expectations, enhance corporate confidence, maintain a reasonable growth in credit scale, increase structural policies and credit structure adjustments, make good use of the special re-lending policies that have already been introduced, and increase support for inclusive finance, Green development, technological innovation and other fields, as well as the support of market entities such as small, medium and micro enterprises and individual industrial and commercial households, ensure that the economy is operating within a reasonable range.
Weak credit
Specifically, at the end of August, the balance of M2 was 231.23 trillion yuan, a year-on-year increase of 8.2%, and the growth rate was 0.1 and 2.2 percentage points lower than the end of the previous month and the same period of the previous year. The balance of M1 was 62.67 trillion yuan, a year-on-year increase of 4.2%. The speed was 0.7 and 3.8 percentage points lower than the end of last month and the same period of last year respectively; the balance of currency in circulation (M0) was 8.51 trillion yuan, a year-on-year increase of 6.3%. Net cash invested in the month was 34.2 billion yuan.
The growth rate of M1 hit a 19-month low, which is closely related to the decline in corporate demand deposits; the growth rate of M2 declined compared with the previous month, mainly due to the shrinkage of household deposits and slower fiscal expenditures. Data show that in August, RMB deposits increased by 1.37 trillion yuan, a year-on-year decrease of 567.2 billion yuan. Among them, household deposits increased by 333.8 billion yuan, non-financial corporate deposits increased by 560.8 billion yuan, fiscal deposits increased by 172.4 billion yuan, and deposits by non-banking financial institutions increased by 99.3 billion yuan.
According to Tang Jianwei, chief researcher of the Bank of Communications Financial Research Center, the main reason for the slowdown in M2 growth is that it was squeezed by two factors: first, the lack of physical financing needs, and the scale of credit issuance is weaker than originally conservative market expectations, with a year-on-year increase; The increase in government bond issuance was greater than market expectations, and the monthly scale hit a new high since the fourth quarter of last year.
“The year-on-year slowdown in M1 was mainly due to the decline in corporate deposits and real estate activity. From the 8.2% growth rate of M2 and with reference to the two-year average, the current monetary and credit environment as a whole remains reasonable and appropriate, and there is no significant tightening.” Everbright Bank Financial Zhou Maohua, a macro researcher of the Marketing Department, told reporters this.
Wen Bin believes that “although fiscal deposits increased by 172.4 billion yuan in August, 361.5 billion yuan less than the same period last year, which is helpful to the creation of currency, the new RMB loans in August were still slightly lower than the same period last year. The base figure for the same period is still at a relatively high level above 10%. The growth rate of M2 fell slightly in August. The growth rate of M1 in August continued to drop by 0.7 percentage points from the previous month to 4.2%, a record low since January last year. Weakened.”
Statistics show that RMB loans increased by 1.22 trillion yuan in August, which was 63.1 billion yuan less than the same period last year. In terms of RMB loans by sector, household loans increased by 575.5 billion yuan, of which short-term loans increased by 149.6 billion yuan, medium and long-term loans increased by 425.9 billion yuan; corporate (institution) loans increased by 696.3 billion yuan, of which short-term loans decreased by 114.9 billion yuan , Medium and long-term loans increased by 521.5 billion yuan, bill financing increased by 281.3 billion yuan; loans from non-banking financial institutions decreased by 68.1 billion yuan.
Zhao Wei, chief economist of Kaiyuan Securities, said that credit “shrinkage” has shifted from a passive contraction under policy control to an “active” contraction under weaker demand. Medium and long-term loans of enterprises have declined year-on-year for two consecutive months, and the decline has expanded. This is mutually corroborated with the impulse of bills, and both point to weak physical financing needs. Residents’ medium- and long-term loans continued to decline year-on-year, which was related to the continued effect of real estate regulation.
Off-balance sheet financing continues the overall shrinking trend
Preliminary statistics show that the stock of social financing scale at the end of August was 305.28 trillion yuan, an increase of 10.3% year-on-year, and a decline from the 10.7% growth rate in July. According to Tang Jianwei’s analysis, “Direct financing has been stable, on-balance sheet financing is relatively weak, and off-balance sheet financing continues to shrink in volume.”
The increase in social financing in August was 2.96 trillion yuan, 629.5 billion yuan less than the same period of the previous year, continuing the trend that the increase in social financing in July decreased year-on-year. The 21st Century Business Herald reporter noted that the main drag on the increase in the scale of social financing is loans to the real economy, trust loans, undiscounted bank acceptances, and government bonds, which are the same as last month.
Data shows that in August, RMB loans to the real economy increased by 1.27 trillion yuan, a year-on-year increase of 148.8 billion yuan; trust loans decreased by 136.2 billion yuan, a year-on-year decrease of 104.6 billion yuan; undiscounted bank acceptances increased by 12.7 billion yuan. A year-on-year increase of 131.4 billion yuan; net government bond financing of 973.8 billion yuan, a year-on-year decrease of 405 billion yuan. Zhou Maohua said, “Social financing decreased year-on-year, mainly due to the continued contraction of base and off-balance-sheet financing last year; last year’s local government bond issuance and new credit base were higher than in normal years, and off-balance-sheet financing continued to shrink.”
It is worth mentioning that the net financing of corporate bonds in August was 434.1 billion yuan, an increase of 68.2 billion yuan year-on-year. Wen Bin said that under the influence of ample funds for the RRR cut in July, bond yields were generally at a low level, and the demand for corporate bond issuance increased. Following the deployment of the Politburo meeting on July 30 to reasonably grasp the progress of budgetary investment and local government bond issuance, special bond issuance has accelerated. In August, new government bond financing hit a new high for the year, but still a decrease of 405 billion yuan over the same period last year. It is expected that the issuance of special bonds will accelerate before the end of the year, which will support social financing.
Zhou Maohua believes that from the perspective of social financial credit data, domestic economic activities are showing signs of picking up. Corporate credit demand is showing signs of stabilization, and local debt issuance is expected to further increase, driving infrastructure investment and small and micro enterprise orders will correspondingly drive related credit demand; at the same time, the domestic epidemic situation is relatively stable, and consumer demand is expected to continue to pick up in the next few months. Enter the peak season of traditional consumer retail.
(Author: Bian Wanli Editor: Zhang Xing)
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