Economics
PBOC Says Don’t Look at Short Term After Money Supply Slumps
- July credit growth was a distortion, China’s central bank says
- Growing gap between M1 and M2 doesn’t suggest ‘liquidity trap’
An elderly man walks past the People's Bank of China in Beijing on Aug. 12.
Photographer: Wang Zhao/AFP via Getty ImagesThis article is for subscribers only.
China’s central bank urged investors not to focus too much on short-term concerns and said the diverging pace of credit expansion doesn’t mean monetary policy is losing steam.
July credit growth slowing to a two-year low was a distortion and the reports for August and September will show it rebounding, the People’s Bank of China said Monday in Q&A statement posted to its website. Markets should avoid over-interpretation of short-term data for a specific month, the PBOC said.