The PBC statisticsshowed that, in January 2005, the performance of financial industry remainedsound and stable. In particular, broad money (M2) and all loans witnessed steadyincrease, growth of savings deposits decelerated, deposits of non-financialinstitutions saw evident decline due to the seasonal factor of the SpringFestival, inter-bank market witnessed increasing turnover of transactions withinterest rates in the money market being at a relatively low level, and the RMBexchange rate remained stable.

Atend-January, M2 reached RMB25.78 trillion yuan, increasing by 14.1 percent YOY,decelerating by 0.5 percentage points from end-2004, or by 4 percentage pointsfrom a year earlier. Narrow money (M1) rose to RMB9.7 trillion yuan, increasingby 15.3 percent, which was 1.7 percentage points higher from end-2004, or 0.4percentage points lower compared with a year earlier. After the deduction of seasonalfactors, annualized month-on-month growth of M2 equals to 16.3 percent. At end-January, cash incirculation (M0) reached RMB2.4 trillion yuan, increasing year-on-year by 7.8 percent,which was 2.9 percentage points higher than that recorded in 2004. Net cashinjection was RMB254.7 billion yuan, RMB600 million yuan more than lastJanuary.

Outstandingloans denominated in both local and foreign currencies in all financialinstitutions amounted to RMB19.31 trillion yuan at end-January, increasing by14.5 percent from a year earlier, 0.1 percentage points higher than the growthrecorded at end-2004 or 6.1 percentage points lower than that of a yearearlier. RMB loans increased by 14.2 percent to RMB18.11 trillion yuan, down0.3 percentage points from end-2004 or 5.9 percentage points from a yearearlier. After the deduction of the seasonal factors, annualized month-on-monthgrowth rate of RMB loans equals to 18.1 percent.

New RMB loans in Januaryalone increased by RMB26.9 billion yuan to RMB280.9 billion yuan. In particular,new short-term loans and paper finance in January increased by RMB30.1 billionyuan to RMB150.3 billion yuan; new medium- andlong-term loans increased by RMB3.4 billion yuan to RMB124.8 billion yuan. Newhousehold loans went up by RMB3.9 billion yuan to RMB80.8 billion yuan, andloans by non-financial institutions and other sectors grew by RMB23 billionyuan to RMB200.1 billion yuan.

Householdsavings deposits decelerated, deposits of non-financial institutions sawevident decrease affected by the seasonal factor of the Spring Festival. Outstandingdeposits denominated in both local and foreign currencies in all financialinstitutions (including foreign-funded ones) rose by 16 percent to RMB25.84 trillionyuan in January, up 0.7 percentage points from end-2004 or down 3.9 percentagepoints from a year earlier. In particular, household deposits grew by 11.9percent to RMB13.01 trillion yuan, down 2.1 percentage points from end-2004;deposits of non-financial institutions increased by 20.6 percent to RMB11.62trillion yuan, up 2.7 percentage pints from end-2004.

RMBdeposits reached RMB24.54 trillion yuan at end-January, increasing by 16.7percent, accelerating by 0.7 percentage points from end-2004. In particular,household savings deposits rose by 11.9 percent to RMB12.22 trillion yuan, down3.5 percentage points from end-2004 or 8.6 percentage points from a yearearlier.

New RMB deposits grew byRMB11.3 billion yuan to RMB211.7 billion yuan. In particular, new householddeposits amounted to RMB268.3 billion yuan, down RMB292.4 billion yuan, withthe contribution of RMB160.4 billion yuan from demand deposits and the residualRMB132 billion yuan from time deposits. Affected by the seasonal factor duringthe Spring Festival, deposits of non-financial institutions declined byRMB177.2 billion yuan.

Renminbi transactions in inter-bankmarket went up, market interest rates lowered evidently. In January, turnoverof renminbi transactions in inter-bank market accumulated to RMB1.2393 trillionyuan, with daily average reaching RMB62 billion yuan, up RMB1.45 billion yuanor 2.4 percent from a year earlier. The monthly-weighted interest rates forinter-bank borrowing and bond repurchase averaged at 2.07 percent and 1.91percent, 0.31 and 0.52 percentage points lower than the previous yearrespectively, representing normal liquidity of financial institutions beforethe Spring Festival.

RMBexchange rate remained stable, being at 8.2765 yuan per US dollar at the end ofJanuary.