PBOC not tightening; M2 skewed by 2020 covid outbreak – China Press

Calming fears over monetary policy tightening, the Economic Daily said that the People’s Bank of China (PBOC) is not on a tightening path and that the slow down in the money supply growth last month is due to the skewed effect.

Key quotes

“The PBOC will maintain the continuity and stability of monetary policy to support the uneven recovery and manage external risks.”

“Friday in an attempt to ease concerns of monetary tightening. The deceleration of April M2 was mainly due to the high comparison base same period last year when the central bank offered easier credit to Covid-hit producers and retailers.”

“If looking at the two-year average growth in 2020 and 2021, M2 and total social financing grew 9.6% and 11.9% respectively, which basically matched the nominal economic growth and maintained a reasonable level.”