Growth in China's money supply slowed in July for a second month, the central bank said yesterday.

M2, the broadest measure of money supply, rose 16.35 percent to 44.64 trillion yuan (US$6.5 trillion) last month from a year earlier, the People's Bank of China said yesterday on its Website. It gained 17.4 percent in June.

The slowdown in the country's trade surplus has helped the central bank to achieve its aim of curbing a too-rapid expansion in money supply. In the first seven months of the year, China's trade surplus fell 9.6 percent from a year earlier to US$123.7 billion.

The trade surplus, foreign direct investment and speculative funds betting on a yuan appreciation are the main sources of money inflows. The yuan had dropped for 10 straight days until Tuesday, indicating a brake is being applied on the fast appreciation in the first half.

The State Administration of Foreign Exchange has also strengthened checks on money flows.

New yuan lending rose by 381.8 billion yuan last month, up 150.4 billion yuan from a year ago.

The outstanding value of yuan lending rose to 29 trillion yuan at the end of July, up 14.58 percent from a year ago.

The growth is up 0.46 percentage point from a month ago and down 1.52 percentage points from the level at the end of last year.

This month, authorities lifted some curbs on lending to help small and medium-size enterprises.

(Shanghai Daily August 14, 2008)