China Hits the Monetary Brakes in April, M2 Falls, TSF Shrinks

M2 money supply fell 0.07 percent in April. Year on year growth fell from 13.4 percent in March to 12.8 percent.

Reuters: China April new loans down sharply as bad debt worries mount
Banks made 555.6 billion yuan ($85.21 billion) in net new yuan loans in April, much lower than expected and less than half the 1.37 trillion yuan seen in March, data showed on Friday.

"Banks may have sought to slow down the pace of lending after rapid rises in Q1 and March," said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai.

"Also, it could be related to (recent) government controls on the property sector and tighter lending rules," Li said, referring to recent attempts to curb sharp home price rises in big cities and limit credit to unprofitable business sectors.
As the first chart shows, monetary policy is a stop-and-go affair in China. The gas was hit in Q1 and now the brakes are being applied.

Total social financing increased 751 billion yuan.

TSF is hitting the gas and brakes month to month in 2016. The monthly increase in TSF (yuan):
January..... 3425 billion
February.... 825 billion
March....... 2336 billion
April........ 751 billion

Here is the impact on reserve coverage of money supply.

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