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FINANCE

PBOC Flags ‘New Normal’ of Slower M2 Growth

By Dong Tongjian
The People’s Bank of China said the country’s broader money supply, or M2, grew at a record-low pace of 9.6% in May from a year ago, suggesting that government efforts to cut leverage are paying off.  Photo: Visual China
The People’s Bank of China said the country’s broader money supply, or M2, grew at a record-low pace of 9.6% in May from a year ago, suggesting that government efforts to cut leverage are paying off. Photo: Visual China

(Beijing) — This might be another sign that shows China has made progress in cutting leverage in its bloated financial system.

On Wednesday, the People’s Bank of China said the country’s broader money supply, or M2, grew at a record-low pace of 9.6% in May from a year ago. The metric was hovering above 10.5% for most of the past year.

M2 refers to cash and checking deposits — the so-called M1 — plus assets such as money market securities and mutual funds that can be converted quickly into cash.

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