China’s M2 money supply was up 8.3% YoY in June, a significant acceleration from 7.9% YoY in May and above expectations of an 8.1% YoY increase.

• RMB loan growth was 7.1% YoY (vs 7.0% YoY expected) with the total balance of loans up to ¥268.56 trillion.
• New RMB loans in H1 totaled ¥12.92 trillion, with ¥11.57 trillion issued to enterprises and only ¥1.17 trillion to households; short-term household lending declined.
• Foreign currency loans dropped -10.6% YoY to $560.9 billion, though there was a net H1 increase of $18.8 billion.
• RMB deposits rose 8.3% YoY to ¥320.17 trillion, slowing from 8.1% YoY previously, with ¥10.77 trillion from households and ¥1.77 trillion from non-financial enterprises.
• Interbank RMB lending rates in June fell to 1.46% (-9 bps MoM) and pledged repo rates declined to 1.50% (-6 bps MoM), indicating looser liquidity conditions.
• Government bond net issuance totaled ¥7.66 trillion in H1 (+¥4.32 trillion YoY), accounting for the bulk of the ¥22.83 trillion increase in social financing.