ThePaper.cn:

At the end of December, M2 grew by 11.8% year on year, 2.8 percentage points higher than the same period in 2021. What is the reason for the high level of M2? What is your perspective on its future trend? Thank you.

Ruan Jianhong:

Thank you for your questions. According to published data, at the end of 2022, the M2 balance was 266.43 trillion yuan, a year-on-year increase of 11.8%. This rate is a 0.6 percentage point lower than the previous month (end of November 2022) and 2.8 percentage points higher than the same period of the previous year (end of 2021). The high growth rate of M2 is mainly due to the increased financial support of financial institutions for the real economy and the corresponding increase in derived currencies.

First, financial institutions significantly increased their bond investments. In 2022, bond investments by financial institutions increased by 6.92 trillion yuan, a year-on-year increase of 1.58 trillion yuan. Among these investments, government bond investments grew by 1.39 trillion yuan.

Second, various RMB loans rose steadily. In 2022, various RMB loans increased by 21.31 trillion yuan, a year-on-year increase of 1.36 trillion yuan.

Third, the equity and other investments of financial institutions increased significantly. In 2022, equity and other investments increased by 522.5 billion yuan, a year-on-year increase of 566.3 billion yuan.

At the same time, the central bank turned over profits of 1.13 trillion yuan, increasing the financial resources available to the government. After fiscal expenditures, the growth rate of M2 increased by around half a percentage point.

In 2023, the PBC will resolutely put into action the spirit of the 20th CPC National Congress and the Central Economic Work Conference, ensure its prudent monetary policy is targeted and powerful, and maintain credit support for the real economy. It is expected that the growth rate of M2 will remain stable and the reasonable ample liquidity will be maintained. Thank you.

Shou Xiaoli:

Thanks to all the speakers and friends from the media. Today's briefing is hereby concluded. Goodbye.

Translated and edited by Zhang Liying, Wang Qian, Xu Kailin, Wang Wei, Huang Shan, Liu Jianing, Liu Sitong, Yan Xiaoqing, Zhang Junmian, Yang Xi, Ma Yujia, Dong Qingpei, Li Huiru, Yan Bin, Daniel Xu, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.