According to the monthly report released by China's central bank on August 11, new bank loans in the country in July registered a sharp month-on-month drop of 77 percent.
By the end of July, broad money M2 reached RMB 57.3 trillion ($8.39 trillion), a year-on-year increase of 28.42 percent. This increase rate was up 10.6 percentage points compared with the end of 2008, and was 0.03 of a percentage point lower than at the end of June this year.
By the end of July, total outstanding bank loans of financial institutions in China stood at RMB 38.1 trillion ($5.58 trillion), up 33.9 percent year on year. This growth rate was up 15.17 percentage points compared with the end of 2008, and was 0.54 of a percentage point lower than at the end of June. Meanwhile, total bank loans issued in the first seven months of 2009 reached RMB 7.73 trillion ($1.13 trillion), up RMB 4.89 trillion ($720 billion) year on year. China's new loans in July reached RMB 355.9 billion ($52.1 billion), down dramatically by 77 percent compared with the previous month.
By the end of July, total deposits at Chinese financial institutions amounted to RMB 57.03 trillion ($8.35 trillion), up 28.54 percent year on year. This growth rate was up 8.81 percentage points compared with the end of the previous year, and down 0.47 of a percentage point month on month.
In July, the inter-bank market posted a total trading turnover of RMB 13.02 trillion ($1.9 trillion), with the average daily turnover up by 40.4 percent year on year to RMB 566.1 billion ($82.9 billion).
In July, the weighted-average interest rate for inter-bank lending was 1.32 percent, up 0.41 of a percentage point month on month. This growth rate was 1.37 percentage points lower compared with the same period last year.
The widespread issuing of credit loans in the first half of 2009 has played a crucial role in boosting China's economic recovery; however, risks also grew as bank lending increased. As a result, the government recently urged financial institutions to limit credit risks when issuing new loans.