【招银国际】China Economy: Liquidity condition to remain easing-250814（7页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 14 Aug 2025 CMB International Global Markets|Equity Research|Economic Perspectives China Economy Economic Perspectives-Liquidity condition to remain easing Liquidity

2、condition to remain easing Social financing extended its recovery thanks to robust government bond issuance while M1 and M2 growth hit a recent high.However,Renminbi loans in the private sector continued to slow as housing demand and business capex remained weak amid the persisted deflationary press

3、ure.Looking forward,the PBOC will maintain easing liquidity condition with low money market rates to stimulate credit demand,which is positive for Chinese stocks and commodities.The central bank might cut RRR by 50bps and LPRs by 10bps in 4Q25 when the YoY growth of housing sales and consumption is

4、expected to slow down due to high base and diminishing policy effects.US$/RMB might mildly rise in August and September as US inflation is expected to rebound while Chinas deflation may deteriorate.US$/RMB may drop again in 4Q25 when US inflation might decline again and China might launch additional

5、 fiscal stimulus towards consumption.We expect US$/RMB to reach 7.10 at end-2025.Social financing continued to recover.Outstanding social financing(SF)edged up to 9%in July from 8.9%(all in YoY terms unless otherwise specified),while the SF flow expanded by 50.5%to RMB1.16trn,which fell short of mar

6、ket expectation of RMB1.41trn.Government bond issuance remained robust,rising 80.8%to RMB1.24trn in July compared to RMB1.35trn in June.The issuance pace was running ahead of the average pace to meet the full-year target of RMB13.9trn incremental debt quota,indicating that the fiscal support in 2H25