Insiders: M2 should be used as an observational indicator

【Industry insiders: M2 should be used as an observational indicator】The People's Bank of China released financial data for April today. As of the end of April 2025, the balance of broad money (M2) was 325.17 trillion yuan, an increase of 8% year-on-year. "In the long run, the growth rate of M2 should be used as an observable indicator." Industry insiders stressed that in the long run, the growth rate of China's broad money M2 remained above 7% overall, which continued to be higher than the nominal economic growth rate. However, in the short term, the growth rate of M2 will also be affected by factors such as market operation and the behavior of economic agents, and there will be certain temporary fluctuations. With the deepening of finance and the transformation of economic structure, market research shows that the correlation between monetary aggregates and economic growth is weakening, and major developed economies have also experienced the process of gradually diluting and abandoning the pegging of aggregate indicators. (Financial Times)