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On August 13, the People's Bank of China released the latest financial data. At the end of July, the stock of social financing scale was 39.572 trillion yuan, an increase of 8.2% year-on-year, which is basically in line with the expected targets of economic growth and price levels.

According to the analysis of China Business News, there are several key points worth paying attention to in the latest financial data.

First, the growth rate of M2 rebounded, while the growth rate of M1 continued to decline. At the end of July 2024, the balance of broad money (M2) was 303.31 trillion yuan, a year-on-year increase of 6.3%, 0.1 percentage point higher than the end of the previous month. The balance of narrow money (M1) was 63.23 trillion yuan, a year-on-year decrease of 6.6%.

Second, the growth rate of social financing scale has rebounded. At the end of July, the stock of social financing scale was 395.72 trillion yuan, an increase of 8.2% year-on-year, 0.1 percentage point higher than the previous month. From January to July, the increase in social financing scale was 18.87 trillion yuan.

Third, loan growth was basically stable. At the end of July, the balance of various RMB loans was 251.11 trillion yuan, an increase of 8.7% year-on-year. From January to July, various loans increased by 13.53 trillion yuan.

How should we correctly view the growth rate of M1? What are the new features of the loan structure? What is the direction of subsequent monetary policy?

What are the reasons behind the continued decline of M1?

The effect of "squeezing out water" from financial data is still evident.