CHINA'S money-supply growth in October exceeded the central bank's annual target for a ninth straight month as a swelling trade surplus injected cash into the economy.
M2, the broadest measure of money supply, rose 18.47 percent from a year earlier to 39.42 trillion yuan (US$5.3 trillion), the People's Bank of China said yesterday on its Website, after gaining 18.45 percent in September. That was more than the 18.3 percent median estimate of 22 economists surveyed by Bloomberg News.
The People's Bank of China last week ordered lenders to set aside bigger reserves for a ninth time this year, raising the ratio to the highest since at least 1987 as the government tries to prevent the economy from overheating. China's trade surplus rose 13.5 percent in October from a year earlier to a record US$27.05 billion, the customs agency said yesterday.
"Liquidity inflows are still abundant," said Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong.
"The central bank is still hawkish about growth and inflation and will continue to tighten monetary policy," he added.
The central bank has increased interest rates five times this year and sold bills to drain cash from the financial system. Its target for money-supply growth this year is 16 percent.
Outstanding local-currency loans rose 17.66 percent in October from a year earlier to 26.03 trillion yuan, the central bank said.
Lenders extended 136.1 billion yuan of new loans, bringing the total to 3.5 trillion yuan for the first 10 months.
Outstanding local-currency deposits climbed 14.94 percent in October from a year earlier to 37.85 trillion yuan, the central bank said. Household savings fell 506.2 billion yuan from the previous month.
Inflation likely accelerated to 6.3 percent last month, close to a decade high, from 6.2 percent in September, according to a Bloomberg survey.
The figure is due today.
Inflation exceeded the key one-year deposit rate of 3.87 percent, prompting Chinese households to speculate on stock and real estate prices. The benchmark CSI 300 Index of shares has soared about 144 percent this year. Property prices in 70 major cities jumped 8.9 percent in September from a year earlier, the biggest increase since records began in August 2005.