Credit growth flat in June

"The slower M2 growth was a result of the central bank's liquidity management measures taken last month," Wang said.

The figures were the first to come from the central bank after last month's money market turmoil, which resulted from the bank's efforts to stamp out speculative lending.

The cash squeeze sent interbank borrowing costs to record highs.

Xie said the measures had actually been aimed at better management of liquidity and changing the expectations for policy easing, not a credit squeeze, and the current stance remains a prudent one.

The State Council said in a report last week that monetary policy would not be loosened because of the economic slowdown, and it would not become stringent because of rapid growth in credit supply.

PBOC Governor Zhou Xiaochuan, speaking in an earlier interview with news media, said the central bank will maintain its prudent monetary stance and properly adjust liquidity to keep the market stable overall.

Guo Tianyong, director of the Research Center of the Chinese Banking Industry at the Central University of Finance and Economics, said banks should maintain an appropriate credit level to support the real economy.

He suggested there should be fine-tuning in policies because they affect small business, agriculture and the urbanization process.

Also according to the statement, China's foreign-exchange reserves, the world's biggest, rose to $3.5 trillion at the end of June from a previous record of $3.44 trillion at the end of March.