New yuan loans run into rough weather

New yuan-denominated loans in July fell far short of market expectations, prompting calls from analysts for China to adopt a more flexible monetary policy as economic weakness persists into the second half of the year.

The People's Bank of China announced on Wednesday that new local-currency loans totaled 385.2 billion yuan ($62.6 billion) last month, much weaker than the widely expected figure of more than 700 billion yuan.

Total social financing, a broad measure of overall credit supply, dropped 546 billion yuan from the previous year to 273.1 billion yuan, while M2 money supply, the broadest measure of money supply, expanded 13.5 percent year-on-year, a decline of 1 percentage point from a year earlier.