BreakingChina’s money supply M2 jumps 12.2 per cent but below expectations, FX reserve falls

China’s money supply M2 rose 12.2 per cent at the end of December, below expectations and also the annual growth target of 13 per cent for last year, while foreign exchange reserves shrank from the previous quarter.

Foreign-exchange reserve fell to US$3.84 trillion at the end of last month, compared with $3.89 trillion at the end of September, People’s Bank of China data showed. The shrinking value may be partly caused by appreciation of the US dollar against other major currencies.

Money supply growth was slower than the consensus for a 12.5 per cent rise, In November, M2 grew 12.3 per cent.

New yuan loans reached 697.3 billion yuan (HK$872.7 billion) last month, lower than the 852.7 billion yuan extended in November. In calendar 2014, new yuan lending reached 9.78 trillion yuan, 890 billion yuan more than in 2013.

Aggregate social financing, the broadest measure for money supply in China, reached 16.46 trillion yuan in 2014, 859.8 billion yuan lower than in the previous year.