Photo taken on October 19, 2020 shows an exterior view of the People's Bank of China in Beijing, capital of China (XINHUA)
China's outstanding yuan-denominated loans expanded sharply in August, in a new sign of sustained economic momentum after the government rolled out a slew of pro-growth measures.
The outstanding yuan loans rose by 1.36 trillion yuan (about $188.63 billion) in August, a sharp rise from 345.9 billion yuan reported in July and 86.8 billion yuan more than that seen in August last year, according to the data from the People's Bank of China (PBOC).
The expansion signaled improvement in market expectations and sentiment, and showed the effects of the country's increased financial support for the real economy amid efforts to boost economic growth and market confidence, said Zhang Jun, chief economist of China Galaxy Securities Co., Ltd.
The outstanding yuan loans expanded by 17.44 trillion yuan in the first eight months of the year, compared with 15.68 trillion yuan recorded a year earlier, according to the PBOC data.
The M2, a broad measure of money supply that covers cash in circulation and all deposits, climbed 10.6 percent year on year to 286.93 trillion yuan at the end of August, the data showed.
The pace of growth eased from a rise of 10.7 percent seen at the end of July, and also moderated from an increase of 12.2 percent registered at the end of August 2022.
The M1, which covers cash in circulation plus demand deposits, stood at 67.96 trillion yuan at the end of August, up 2.2 percent year on year. The M0, the amount of cash in circulation, went up 9.5 percent from a year ago to 10.65 trillion yuan at the end of last month.
Newly added social financing, a measurement of funds that individuals and non-financial firms receive from the financial system, came in at 3.12 trillion yuan in August, up from 528.2 billion yuan in July and 631.6 billion yuan more than the same period last year.
The reading came following an array of indicators pointing to a sustained momentum of China's economic recovery.
To support economic recovery, the PBOC vowed in the second-quarter monetary policy report that it will use a combination of monetary policy tools to keep liquidity reasonable and ample, and ensure that the expansion of credit supply and social financing should basically match the country's nominal economic growth rate.
Monday's data offers further proof that China's economic operation remains in a reasonable range, and with the effects of supportive policies gradually filtering through, financing demand of the real economy was enhanced, leading to the strong growth of August's financial data, said Wen Bin, chief economist of China Minsheng Bank.
Wen said the central bank might further cut the reserve requirement ratio in the last quarter of the year, and enhance the use of structural and policy-based financial instruments to spur investment and boost consumption.
As the economic recovery continued apace, the country is likely to see stable expansion in its credit supply with improved credit structure, which, in return, will further strengthen the momentum of economic recovery, he said.