China said Friday the nation's lenders issued a lower-than-expected 492.6 billion yuan ($77 billion) in new loans in July, indicating Beijing's efforts to rein in liquidity are taking effect.
The figure was lower than 633.9 billion extended in June and 25.2 billion yuan less than the same month last year, the People's Bank of China said in a statement.
It was also below forecasts of 555 billion yuan by 11 economists surveyed by Dow Jones Newswires.
The broadest measure of money supply, M2, was up 14.7 percent year-on-year at the end of July compared with a 15.9 percent rise at the end of June, the central bank said, in another sign of slowing credit.
"Today's data should reassure Beijing that rate hikes and other measures are having the intended effect of tightening credit conditions and reducing upward pressure on inflation," said Royal Bank of Canada economist Brian Jackson.
Policymakers have been pulling on a variety of levers to rein in bank lending on fears soaring property prices and inflation -- which hit a more than three-year high of 6.5 percent in July -- could trigger social unrest.
The central bank has hiked interest rates five times since October and increased amount of money banks must keep in reserve numerous times in the past year.
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