BEIJING (Reuters) - China's foreign exchange reserves soared to a record of more than $3 trillion by end-March, while its money supply growth blew past forecasts, threatening to aggravate the nation's inflation woes and trigger more policy tightening.This after months and months of reports that the PBoC was tightening, the PBoC had given up stimulating exports, and the Chinese government was moving the economy towards serving "domestic consumption."
Chinese banks extended 679.4 billion yuan ($104 billion) in new local currency loans in March, while the broad M2 measure of money supply rose 16.6 percent from a year earlier, both above market expectations.
Tapping the brakes on money and lending growth has been a crucial part of Beijing's campaign to rein in inflation, which probably hit a 32-month high of 5.4 percent in the year to March, according to local media reports.
After making progress at the start of the year in mopping up excess cash, the People's Bank of China appeared to lose some ground in March.
Don't believe a word of it. Old habits die hard, and crusty old corporate racketeers don't like to lose money. Like our own situation, I doubt the Chinese elite and the government that serves it will change its "economic model" until that model has left the country a smoking ruins.