M2 growth has increased for three reasons

On November 11, Jin Shi Data reported that according to data from the Central Bank, as of the end of October, the balance of Broad Money (M2) was 309.71 trillion yuan, a rise of 7.5% year-on-year, up 0.7 percentage points from the end of the previous month. Looking back over the past two months, the cumulative growth rate of M2 has increased by 1.2 percentage points. Market experts analyze that there are mainly three factors: First, funds from the bond market and wealth management are flowing back to deposits, and investors’ risk preferences have shifted from being dominated by risk aversion sentiment to more positive asset allocation; Second, with the formal launch of two tools to support the stable development of the Capital Market, commercial banks are increasing financing to non-bank institutions, which directly promotes the increase in M2 through derivatives; Third, fiscal expenditures are accelerating, and more fiscal deposits are being converted into corporate deposits.