China's monetary policy delivered tangible results in bolstering the real economy in the first half of this year as the financial aggregates grew at a reasonable pace and the overall cost of social financing remained at a historically low level, a senior official of China's central bank said at a press conference in Beijing on Wednesday. "At the end of June, the broad money supply (M2) grew by 8 percent year over year and the outstanding balance of social financing grew by 7.4 percent year on year. The growth rates of both indicators continued to exceed that of nominal GDP (gross domestic product). In the first half of the year, new renminbi loans totaled 10.72 trillion yuan (about 1.58 trillion U.S. dollars) and new bond financing amounted to 8.51 trillion yuan (about 1.26 trillion U.S. dollars). The share of bond financing increased and the financial system's support for the real economy remained solid," said Zou Lan, deputy governor of the People's Bank of China (PBOC), the country's central bank.
"In June, the weighted average interest rate on newly issued corporate loans was about 3 percent, some 20 basis points lower than the same period last year, and the interest rate on newly issued personal housing loans was approximately 3.1 percent, largely on par with the same period last year. As of the end of June, the outstanding balance of inclusive loans to small and micro enterprises grew by 8.3 percent year on year; the outstanding balance of medium- and long-term loans to the industrial sector rose by 5.9 percent; and the outstanding balance of medium- and long-term loans to the service sector (excluding real estate) went up 9.2 percent year on year -- all exceeding the growth rate of total loans," he said.
The official noted the Chinese fiat currency has been appreciating at a mild pace.
"Capital markets remained active and the bond market operated steadily. Currently, the yield on 10-year government bond hovers around 1.73 percent. The renminbi exchange rate has remained stable with an upward trend. The renminbi had appreciated by 4.7 percent against a basket of currencies by the end of June and by 3 percent against the U.S. dollar compared to the end of last year," said Zou.
China's financial sector delivers solid support for real economy in H1: central bank
China's financial aggregates grew at a reasonable pace and the financial system provided stable support for the real economy in the first half of this year, according to the latest official data released by the central bank on Wednesday.
People's Bank of China (PBOC) data show that at the end of June, the balance of the broad money supply (M2) grew by 8 percent year over year, continuing to exceed that of nominal GDP (gross domestic product).
In the first half of the year, new Chinese yuan loans totaled 10.72 trillion yuan (about 1.58 trillion U.S. dollars) and new bond financing amounted to 8.51 trillion yuan (about 1.26 trillion U.S. dollars). The share of bond financing increased and the financial system's support for the real economy remained solid in the first six months.
While aggregate financing volume increased, more credit funds flowed into key areas and weak links such as sci-tech innovation and small and micro enterprises in the first half of the year.
As of the end of June, the outstanding balance of inclusive loans to small and micro enterprises grew by 8.3 percent year on year, and the outstanding balance of medium- and long-term loans to the industrial sector rose by 5.9 percent -- both exceeding the growth rate of total loans.
The overall social financing cost was at a historically low level in the six-month period.
In June, the average interest rate on newly issued corporate loans was around 3.0 percent, about 20 basis points lower than the same period of the previous year. The interest rate for newly issued personal housing loans was about 3.1 percent, basically on a par with that of the same period last year.
The Chinese exchange rate remained stable with an upward trend in the first half of the year. The Chinese yuan had appreciated by 4.7 percent against a basket of foreign currencies by the end of June and by 3 percent against the U.S. dollar compared to the end of last year. "Overall, major macro financial indicators reflecting the operation of the financial sector fully demonstrate the status of the appropriately accommodative monetary policy. The social financing conditions are relatively accommodative, while the quality and efficiency of financial services for the real economy are constantly improving," said Zou Lan, deputy governor of PBOC.
China's financial aggregates grow at reasonable pace in Jan-June
