Financial data released by the central bank in August 12th showed that money supply and new money in July

Meanwhile, the central bank opened the market last week.

The central bank data show that in July, the balance of broad money (M2) was 77 trillion and 290 billion yuan, an increase of 14.7% over the same period last year, and the growth rate reached a new low of six years. The growth rate of narrow money (M1) also reached a new low of two years. In that month, RMB loans increased by 492 billion 600 million yuan, representing a slight increase of 25 billion 200 million yuan over the same period.

The CPI growth rate reached 6.5% in July, the highest in 37 months.

Also released on Friday, the central bank's "monetary policy implementation report for the second quarter of 2011" (hereinafter referred to as the "executive report") said: "adhering to the basic orientation of regulation and control remains unchanged, and continue to stabilize the overall price level as the primary task of macroeconomic regulation and control."

However, in August 9th, the executive meeting of the State Council pointed out that the international financial and economic uncertainties should be increased, and that we should prepare for risk prevention. In addition to maintaining the continuity and stability of macroeconomic policies, we should improve the pertinence, flexibility and foresight of policies, and handle the relationship between the three stable and fast economic development, the adjustment of economic structure and the management of inflation expectations.

In addition, the executive report referred to the latest order of policy instruments: interest rate, exchange rate, open market operation, deposit reserve ratio and macro Prudential Management.

Liquidity is obviously tight.

"The most outstanding feature of money and credit in July is that the main data are below the total.

July is the beginning of the season. In general, new loans are more. But in July, M2 and new loans were all low.

In fact, if the off balance sheet assets of commercial banks are pferred to the table, the actual level will be lower.

The bank's research report said that the cumulative impact of the reserve ratio and the dynamic adjustment of differential reserve ratio, and the implementation of the new loan rules reduce the deposit creation ability of the banking system. The growth of bank deposits is limited, which has led to the weakening of the credit capacity of banks.

At the same time, the continuous increase and expansion of note financing may indicate that the demand for local real economy credit is slowing down.

Statistics show that in July, the financing of non financial enterprises and other departments increased by 65 billion 300 million yuan, while the June note financing decreased by 142 billion 200 million yuan.

The bank's research report also said that the new loans fell more, and the M2 growth rate was not only far below the target of 16%, but also reached the lowest point in recent years, indicating that the effect of the tightening policy is accelerating, and the current liquidity is obvious.

Policy expectations: overall robust and directional easing

Nomura believes that monetary policy has changed the austerity stance in July, because external uncertainty is now overriding inflation fears.

"The interest rate and reserve requirement ratio will remain unchanged for the rest of the year.

But if the situation worsens overseas, I believe the first policy action will be to reduce the deposit reserve ratio.

Nomura has three reasons: first, the policy "flexibility" and "risk preparedness" put forward by the executive meeting of the State Council in August 9th; secondly, the interest rate in money market has dropped to its lowest level since June 2010, suggesting that monetary policy may have eased; third, the central bank and the Banking Regulatory Commission are encouraging banks to provide loans to affordable housing projects with benchmark or preferential interest rates, and encourage banks to lend money to rural agricultural related projects and small and medium enterprises. Such "fine-tuning" implies that monetary policy is shifting to a relaxed stance.

But there are still many people who will raise interest rates during the year.

"The door to continue to raise interest rates is still open, and there is 1~2 interest rate hike in the year."

Lu commissar believes that the focus of regulation is still controlling inflation.

Lu commissar also said that the new credit in July was lower than expected, mainly due to the lack of strength in deposits.

It may not be the reason for the demand side, but mainly the supplier.

Therefore, there is no need to worry about the future economic growth prospects.

In addition, more economists are cautious.

"China's monetary policy is expected to enter the stage of prudent balance and foresight, and the overall tone remains stable."

The above research shows that open market operation and credit oriented easing will be the first choice, and exchange rate may also be used. The reserve ratio and interest rate will be most prudent.

Fu Bingtao, a researcher at the strategic planning department of the Agricultural Bank of China, believes that the current debt crisis in the US and Europe is still uncertain. The Chinese economy is faced with many complicated uncertainties.