REVIEW OF FINANICAL PERFORMANCE IN FEBRUARY 2004

Preliminary statistics showed that M2 reached 22.71 trillion yuan at the end of February, increasing by 19.4 percent; M1 rose 19.8 percent to 8.36 trillion yuan. The Spring Festival holiday fell on a different month this year than last, which is the main reason for the higher growth of M2 and M1 in February. Adjusting seasonal factors, the annualized monthly growth rate of M2 and M1 were both within the target of 17 percent of the whole year.

At the end of February, outstanding deposits denominated in both local and foreign currencies in all financial institutions (including foreign-funded ones) reached 22.67 trillion yuan, up 20 percent. Among those, RMB deposits totaled 21.46 trillion yuan, increasing by 21.5 percent. The deposits in both local and foreign currencies went up by 634.4 billion yuan in January and February, up 73.8 billion yuan compared with the same period last year. In particular, the accumulated increase of RMB deposits stood at 662.1 billion yuan, 91.8 billion yuan stronger than the rise for the same period last year.

Corporate deposits in both local and foreign currencies were 7.61 trillion yuan at the end of February, up 20.6 percent. Corporate deposits declined by 123.8 billion yuan in the first two months, decreasing 12.4 billion yuan more compared with the same period last year. Outstanding household savings deposits in both local and foreign currencies in all financial institutions reached 11.75 trillion yuan at the end of February, recording a year-on-year rise of 17.2 percent, among which the rapidly increasing RMB savings deposits hit 1.106 billion yuan, up 19.2 percent.

At the end of February, outstanding loans denominated in both local and foreign currencies in all financial institutions reached 17.51 trillion yuan, up 21.3 percent, among which RMB loans climbed by 20.7 percent to 16.38 trillion yuan. The accumulated increase of loans in both local and foreign currencies totaled 509.2 billion yuan in the first two months 2004, a year-on-year increase of 55.3 billion yuan. Among these, the accumulated increase of RMB loans was 462.5 billion yuan, rising year-on-year by 24.6 billion yuan; the accumulated increase of FX loans was US$5.64 billion yuan, increasing year-on-year by US$3.71 billion.

In terms of institutions, rural credit cooperatives and urban commercial banks witnessed comparatively more loans. Loans granted by state-owned banks increased by 212.3 billion yuan, 82.4 billion yuan less than the same period last year.

In terms of loan utilization, loans for infrastructure and FX loans grew comparatively fast, while medium-term working capital loans, commercial paper financing, and short-term loans to the construction and business sectors decreased markedly compared with the previous year.

In February, the interbank market witnessed active trading, and the market interest rate dropped from the previous month.