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China’s M2 growth hit record low again, new loans drop sharply

China's credit growth slowed sharply in October, despite pressure by regulators on banks to help keep cash-starved companies afloat, pointing to further weakening in the economy in coming months. Many believe the weak data is making an interest rate cut more possible.

The M2 money supply increased 8 per cent from a year earlier, hitting the record low growth for the second time after June this year. That's compared with an expected growth of 8.4 per cent and a growth of 8.3 per cent registered in the previous month, according to data released by the People's Bank of China on Tuesday.

Chinese banks extended 697 billion yuan new loans in October, sharply down from 904.5 billion yuan expected by the market and about half the amount of new loans granted in the previous month, shows the data.

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