According to the latest data released by the People’s Bank of China, in August the year-on-year growth rate of broad money supply (M2) was 7.5%, slightly below the market’s previous expectation of 7.6% and continuing to ease from 7.7% in the prior month. From a technical and quantitative perspective, after a period of sideways consolidation, the M2 growth rate showed a modest pullback, suggesting that the current pace of domestic credit expansion remains relatively steady and that the macro liquidity environment is in a phase of structural adjustment.
Although this figure is marginally lower than market expectations, when analyzed from the perspective of liquidity cycles, it actually leaves more room for stronger counter-cyclical easing policies to be introduced later, such as further reductions in reserve requirement ratios (RRR) and interest-rate cuts. Historically, when the pace of monetary expansion slows to within the policy’s tolerance boundary, the central bank often injects incremental liquidity through RRR cuts or open market operations to offset downward pressure.
In traditional financial markets, expectations that China will step up monetary stimulus have grown significantly. The RMB exchange rate has, in the short term, remained oscillating within a reasonable technical support range. Meanwhile, commodities and major Asia-Pacific indices have formed solid bottoms near key moving averages, demonstrating strong resilience against declines and rebound momentum.
For the cryptocurrency market,
$BTC and mainstream risk assets are extremely sensitive to global central banks’ liquidity cycles. If China releases easing signals as expected to boost the economy, it will further raise global overall liquidity expectations, prompting over-the-counter capital to tilt toward the crypto sector in search of higher Alpha returns—providing solid technical and capital-flow support for a rebound in risk appetite in the fourth quarter.📈
#ChinaEconomy #M2MoneySupply #Liquidity