In August, the "scissors difference" between M1 and M2 reached its lowest value in over four years

On September 12, the People's Bank of China announced that as of the end of August, the growth rate of narrow money (M1) was 6%, an increase of 0.4 percentage points from the previous month; the growth rate of broad money (M2) was 8.8%, unchanged from the previous month. The difference in growth rates between M1 and M2, which reflects the degree of fund activation, further narrowed to 2.8% from the previous month, the lowest level since June 2021. Market analysts believe that the "scissors difference" between M1 and M2 has significantly converged this year, with more funds being converted into demand deposits, which is conducive to consumption, investment, and other economic activities. (Securities Times)