New loans in China decline again after two months of recovery.

Data released on Monday by the People's Bank of China showed a sharp slowdown in the volume of new loans extended by Chinese banks in yuan during October, which came in worse than market expectations after two months of recovery.

According to the data, the value of new loans in China during October amounted to 500 billion yuan, significantly lower than the expectations of 770 billion yuan. The reading was also much lower than the new loans provided by Chinese banks in September, which had recorded 1.59 trillion yuan.

It is worth noting that there is a direct relationship between the volume of borrowing and spending, as consumers and businesses tend to seek credit and increase borrowing when they are confident about their future financial situation and feel comfortable spending money, which usually reflects on economic activity and growth.

At the same time, the People's Bank of China data showed that broad money supply M2 rose by 7.5% in October compared to the same month last year, which was better than expectations of a 7.0% increase. The previous reading for September recorded a growth of 6.8%.