InJanuary, the performance of financial industry remained sound and stable.Growth of money supply witnessed large deceleration. RMB loans expanded RMB65.6billion yuan less than last January, and the growth of all types of loans byfinancial institutions continued to decelerate. Corporate deposits declinedmarkedly while household savings deposits grew rapidly. Inter-bank marketwitnessed active transactions and interest rates in the money market sawmoderate rise.
Atend-January, broad money (M2) reached RMB22.51 trillion yuan, increasing by 18.1percent YOY, decelerating by 1.2 percentage points from a year earlier, or by1.5 percentage points from end-2003. M2 increased by 1.1 percent onmonth-on-month basis taking no account of season factor, or by 14 percent onyear-on-year basis. Narrow money (M1) rose to RMB8.38 trillion yuan, increasingby 15.7 percent, which was 3.8 percentage points lower compared with a yearearlier, or 3 percentage points lower than that recorded for 2003. The reasonfor the deceleration of M1 growth is because corporate deposits dropped byRMB287.7 billion yuan in January, RMB156.6 billion yuan more than the decrease recordeda year earlier. Net cash injection was RMB254.1 billion yuan, RMB142.6 billionyuan less than last January. At end-January, cash in circulation (M0) reachedRMB2.23 trillion yuan, increasing year-on-year by 4.9 percent.
Outstandingdeposits denominated in both local and foreign currencies in all financialinstitutions (including foreign-funded ones) reached RMB22.28 trillion yuan atend-January, among which RMB246.4 billion yuan was increased in January alone,RMB3.1 billion yuan less than the increase of last January or a rise of 19.9percent year-on-year, 0.1 percentage points lower compared with last January.Outstanding corporate deposits in both local and foreign currencies stood atRMB7.46 trillion yuan, decreasing by RMB270.5 billion yuan in January, RMB129.6billion yuan more than the decrease of last January. The mainreason behind the decelerated growth of corporate deposits in January wasmainly two-fold: salaries and bonus distributed for the New Year and SpringFestival holidays in administrative and public institutions; second, new loansin both local and foreign currencies decreased by RMB58 billion yuan, resultingin the decrease of corporate deposits.
Atend-January, outstanding household savings deposits denominated in both local andforeign currencies in all financial institutions (including foreign-fundedones) reached RMB11.63 trillion yuan, increasing by 18.6 percent, 10.93trillion yuan of which was RMB deposits. Increase of household deposits in Januarywas RMB563.9 billion yuan, accelerating by RMB192.4 billion yuan from a yearearlier.
RMBloans in financial institutions continued to decline for 5 months in a row,monetary policy measures continued to achieve expected results. Outstandingloans denominated in both local and foreign currencies in all financialinstitutions reached RMB17.27 trillion yuan, increasing by 20.6 percent from ayear earlier, 0.8 percentage points lower than the growth recorded for 2003. Growthof loans in January amounted to RMB281 billion yuan, RMB58 billion yuan lessthan the growth recorded in last January. In particular, growth of RMB loanswas RMB262.9 billion yuan, down by RMB65.6 billion yuan; growth of loansdenominated in foreign currencies was USD2.18 billion, up by USD900 million.
Interms of loan structure, paper financing increased by RMB7.2 billion yuan,RMB58.1 billion yuan less than the growth recorded a year earlier; in long andmedium-term loans, consumer credit grew by RMB35.7 billion yuan, RMB12 billionyuan less than the growth recorded a year earlier; in short-term loans, loansextended to the industrial sectors increased by RMB21.5 billion yuan, RMB13.8billion yuan less than the growth recorded a year earlier, while capitalconstruction loans accelerated by RMB17.3 billion yuan to RMB53.8 billion yuan.
RMB exchange rate stood at 8.2770 yuan per US dollarat the end of January.
Active transactions, in particular marked increase ofoutright cash transactions were witnessed in the inter-bank market and interestrates soared by a large margin. Turnover of RMB transactions in the inter-bank market reachedRMB1.0892 trillion yuan, increasing by RMB198.9 billion yuan or 22.3 percentfrom a year earlier. Monthly-weighted average interest rates in inter-bankborrowing market and bond repurchase market went up by 0.22 and 0.15 percentagepoints from a year earlier to 2.38 percent and 2.43 percent respectively, up by0.21 and 0.26 percentage points over end-2003.
