JPMorgan Econ FI-China TSF growth moderated to 9.0 in February Interpreting...-107050404

JPMORGANAsiaPacificEconomicResearch15March2024China:TSFgrowthmoderatedto9.0%inFebruaryInterpretingthePBOC’smonetarypolicyoperations•CreditgrowthslowedinFebruary.TSFgrowthprintedat9.0%(vs.9.5%EmergingMarketsAsia,EconomicandPolicyResearchinJanuary)andloangrowthwas10.1%(vs.10.4%inJanuary).Theslowdownismainlyduetonotablefront-loadingofcreditextensioninHaibinZhu1Q23andback-to-normalpacethisyearasinstructedbythePBOC.(852)2800-7039•Mediumandlong-termcorporateloansaccountedfor89%ofnewloanhaibin.zhu@jpmorgan.comBloombergJPMAHZHUincreaseinFebruary.Fornon-loancomponent,governmentbondrose601billionandaccountedfor38.5%ofTSFincrease.Bycontrast,GraceNghouseholdloansdeclinedby591billionyuanandshadowcreditdeclinedby329billionyuan.(852)2800-7002grace.h.ng@jpmorgan.com•ThePBOCkept1-yearMLFrateunchangedat2.5%,withnetliquidityTingtingGewithdrawalforthefirsttimesinceNovember2022.Today’sratedecisionisaffectedbyinflationpick-upinFebruaryanduncertaintyinFedratecut(852)2800-0143outlook.Wemaintainourforecastofanextratecutin2Q.tingting.ge@jpmorgan.com•PBOC’smonetarypolicyoutlookin2024:WeexpectacontinuationinJiYaninterestratepolicyandcreditpolicy,butanexpansioninstructural(852)2800-7673monetarypolicyinstruments.ji.yan@jpmorgan.comJPMorganChaseBank,N.A.,HongKongBranchChina’sFebruaryTSFflowfellto1,558billionyuan(consensus:2,340...