April M2 Slows On Decreasing Bank Deposits

The deceleration of M2 money supply growth was mainly driven by residents' increasing enthusiasm for buying financial management products which have diverted bank deposits, and also reduced the need for non-bank institutions to borrow from banks, Yicai.com reported citing Zhang Yu, chief macro analyst at Huachuang Securities. More than CNY2 trillion of companies’ and residents’ deposits were diverted to asset-management products in April from March, an unnamed source said. Meanwhile, a considerable number of inflated and irregular deposits and loans have been reduced amid tightening regulations, which also slowed down M2 growth to 7.2% y/y in April from March’s 8.3%, Zhang noted.