Financial industry performed stably in October featuring a slight pick up of broad money M2, continued rapid growth of narrow money M1, stable growth of RMB loans, slight decrease of household deposits and healthy capital situation in corporate sector, dynamic RMB trading in the inter-bank market and a moderate rise of market interest rates.
Growth of broad money M2 picked upslightly and narrow money M1 continued to increase rapidly. At end-October 2006, broad money M2 amounted to 33.27 trillionyuan, an increase of 17.1 percent year on year, up 0.3 percentage points fromthe previous month, but down 0.9 percentage points from the record last year.
After seasonal adjustment, the annualized month on month growth of broad money M2 at end-October was 15.7 percent, an acceleration of 3.0 percentage points over the growth in September. Narrowmoney M1 reached 11.84 trillion yuan, representing an increase of 16.3 percent year on year, up 4.2 percentage points and 0.6 percentage points over the record a year earlier and end-September respectively. In terms of structure, rapid growth of narrow money M1 was mainly due to continued and large increaseof corporate demand deposits in October.
At end-October, cash in circulation M0increased by 14.0 percent year on year to 2.5 trillion yuan, an acceleration of5.0 percentage points over October 2005. Net cash withdrawal in October stood at 72.3 billion yuan, 34.3 billion yuan more than that recorded in October 2005.
The growth of RMB loans remained stable. At end-October, the outstanding balance of loans denominated in both local and foreign currencies in all financial institutions totaled 23.39 trillion yuan, an growth of 14.4 percent year on year, down 0.2 percentage points from the previous month, but 0.7 percentage points higher than a year earlier.
At end-October, the outstanding balance of RMB loans registered 22.12 trillion yuan, a year on year increase of 15.2percent, a growth similar to that at end-September, and 1.4 percentage points higher compared with the same month last year. After seasonally adjusted, the annualized month on month growth of RMB loans at end-October was 13.5 percent,an acceleration of 2.9 percentage points over the previous month. In particular, RMB loans granted to households increased by 19.1 percent year on year, up 0.5percentage points from the previous month; loans granted to non-financial institutions and other sectors rose by 14.4 percent year on year, down 0.2 percentage points from end-September.
New RMB loans in all financial institutions posted an increase of 17.0 billion yuan in October, a drop of 9.4 billion yuancompared with October 2005. In particular, new medium-and-long-term loans was 83.8 billion yuan, an acceleration of 31.9 billion yuan year on year; short-term loans and paper financing dropped 70.5 billion yuan, a further decrease of 43.6 billion yuan from the decrease in October 2005.
Savings deposit declined slightly and capital situation in corporate sector was healthy. At end-October, the outstanding balance of loans denominated in both RMB and foreign currencies in all financial institutions amounted to 34.21 trillionyuan, up 16.3 percent year on year, a deceleration of 0.1 percentage points and1.7 percentage points from that in September and the same period last year respectively. In particular, the outstanding balance of household deposits denominated in both local and foreign currencies increased by 14.5 percent y-o-y to 16.59 trillion yuan, down 3.4 percentage points from the same month last year; the outstanding balance of non-financial institution deposits denominated in bothlocal and foreign currencies totaled 15.3 trillion yuan, an acceleration of15.0 percent year on year, down 4.3 percentage points from that of October last year.
At end-October, outstanding RMB deposits amounted to 32.93 trillion yuan, a year on year increase of 17.0 percent, down 0.2 percentage points and 2.0 percentage points from the growth atend-September 2006 and end-September 2005 respectively.
At end-October, outstanding RMB household deposits grew by 15.5 percent y-o-y to 15.8 trillion yuan, a deceleration of 0.5 percentage points from the previous month, reaching a bottom not seen since April 2005. The household deposits decreased by 7.6 billion yuan in October, the first month-on-month decline since June 2001. In particular, the decrease of current deposits was 2.16 billion yuan less than the decrease in October 2005; in contrast, growth of time deposits dropped by 60.79 billion yuan compared with the same period last year. Due to continued brisk transactions insecurities market, some household deposits moved to securities market. The outstanding customer margin of securities companies reached 604.2 billion yuan at end-October, an acceleration of 216.1 billion yuan over the previous month, and a jump of 182.9 percent year on year.
RMB corporate deposits reached 10.7trillion yuan at end-October, a growth of 15.6 percent year on year, up 0.2 percentage points over the growth at end-October last year. Corporate demand deposits have registered a strong growth since the beginning of 2006. FromJanuary to October, corporate demand deposits cumulatively increased by 704.6billion yuan, an acceleration of 601.5 billion yuan from the same period last year, reflecting a healthy capital situation in the corporate sector.
RMB transactions were brisk in the inter-bank market with a moderate rise in market interest rates. Turnover of RMB transactions in the inter-bank market amounted to3.3708 trillion yuan in October. Daily turnover averaged 187.3 billion yuan, up 73.6 percent year on year, and an increase of 79.4 billion yuan from the growth in October 2005.
The weighted average interest rate fo rinter-bank borrowing and bond pledged repo edged up by 2.4 percent and 2.22 percent respectively, a growth of 0.08 percentage points and 0.1 percentage points from end-September respectively, or of 0.68 percentage points from end-2005.
