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Central bank releases first half-year figures

By Liang Fei (Global Times)

08:50, July 15, 2013

New yuan-denominated loans reached 5.08 trillion yuan ($0.83 trillion) in the first half of this year, 221.7 billion yuan higher than a year ago, the People's Bank of China said in a statement on its website Friday.

For June alone, new yuan-denominated loans were 860.5 billion yuan, 59.3 billion yuan less than the same period in 2012, the central bank said. But the figure was bigger than the 667.4 billion yuan in May.

The country's social financing, a measure of funds raised by entities through bank credit and other means, amounted to 10.15 trillion yuan in the first half, a 2.38 trillion yuan rise year-on-year.

The central bank last week reiterated that the government will maintain a prudent monetary policy and "tap the idle capital and make good use of the incremental capital" which is the core idea of the financial measures in the second half of this year.

Xu Guangfu, a strategy analyst at Xiangcai Securities, told the Global Times Friday that for the whole year, new yuan-denominated loans are likely to stand at around 9 trillion yuan, slightly higher than the 2012 figure of 8.2 trillion yuan.

"The government is not very likely to curb credit too much, in a bid to avoid a hard landing," said Xu, who also noted that the figure will not grow too much either as the economy is still in a restructuring process.

The IMF trimmed its China growth forecast for 2013 to 7.8 percent on Wednesday, down from the previous 8.1 percent. Other institutions such as Deutsche Bank also cut their China forecasts.

Li Daxiao, director of research with Yingda Securities, also told the Global Times Friday that the government is likely to adopt a neutral and stable monetary policy in the next half of this year.

M2, a broad measure of money supply that covers cash in circulation and all deposits, and also a key factor that affects price levels, increased 14 percent year on year to 105.45 trillion yuan at the end of June, according to the statement.

The central bank has set a M2 growth target of 13 percent for 2013, which means that M2 will remain at round 110 trillion yuan by the end of this year.

"M2 growth will be slower in the next half," Yin Zhongbin, an analyst at Southwest Securities, said on his verified Sina Weibo account Friday.

New yuan-denominated bank deposits in the first half reached 9.09 trillion yuan, a 1.71 trillion yuan rise year-on-year.

Yin said that capital has been mostly circulated among financial institutions instead of getting into the real economy in the first half of this year, and the real economy may get stronger financial support in the next half.

The State Council has announced a series of measures to ensure that the real economy can get the needed financial support. Li at Yingda Securities added that the incremental capital will be channeled into healthy industries that do not suffer a supply glut.

The report also noted that China's foreign reserves reached $3.5 trillion by the end of June, compared with $3.24 trillion in the first half of 2012. And cross-border yuan settlements reached 2.05 trillion yuan, up from 1.25 trillion in the first half of 2012.

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