M2 statistical coverage has been changed.
It now includes 2 new items...
1) Deposits of non-deposit-taking financial institutions (Investment Banking, Wholesale Banking) in deposit-taking financial institutions
2) Deposits of housing provident fund
The change is to reflect and take into account the development and use of newer financial instruments. Both are already in substantial volume and have relatively large impact on money supply.
Based on the expanded coverage,
M2 posted 81.68t RMB (in Oct 2011) and 72.35t RMB (in Oct 2010),
OR 12.9% yoy UP.
That is, (81.68-72.35)/72.35*100%=12.9%.
Note that this is already reflected in the Oct 2011 statistics
Officially stands at USD 3.2t
A Reuters report dated December 2, 2011, says that the PBoC think that Home Prices are at a turning point.
What does this means, in policy terms?
Likely, there will be a turning point in the monetary policies.
The polcymakers wants to see a gradual incremental trend in housing prices.
NOT a precipitous 20% drop that will have drastic consequences on banks and their NPLs.