BEIJING, Sep. 11 -- China's new yuan-denominated lending in August rose to 545.2 billion yuan (80.53 billion U.S. dollars) from 532.8 billion in July, the People's Bank of China (PBOC), the central bank, said in a statement Saturday.

The August figure brought new yuan-nominated loans for the first eight months to about 5.70 trillion yuan, compared with 8.15 trillion yuan in the same period last year.

Total outstanding yuan-denominated loans stood at 45.68 trillion yuan at the end of August, up 18.6 percent year on year, according to the statement on the PBOC website.

"The new lending for August is within market expectations," said Liu Yuhui, economist with the Chinese Academy of Social Sciences.

The Chinese government fixed this year's target for new loans at 7.5 trillion yuan, after a record 9.59 trillion yuan of new lending in 2009 fueled fears of asset bubbles and inflation.

As it vows to keep monetary policy relatively loose, the central bank has ordered commercial banks to lend at a reasonable pace and to curb credit for energy-intensive industries.

It also tightened controls over lending to local government financing vehicles and the property sector.

The drop in lending compared with the first half of the year was the result of government policy, according to a Bank of Communications report.

Analysts said lending will be steady over the rest of the year as accelerated construction of affordable housing, reconstruction in disaster-hit area and investment in China's underdeveloped western regions props up loan demand despite a slowing in economic growth rates.

With about 5.70 trillion yuan of credit extended in the first eight months, lending must average less than 500 billion yuan for each of the following four months.

China's broad money supply (M2), which covers cash in circulation and all deposits, had increased 19.2 percent year on year to 68.75 trillion yuan at the end of August.

The M2 figure was an increase of 1.6 percentage points from the end of July but a drop of 9.3 percentage points compared with the same period of last year, according to the statement.

Narrow money supply (M1), cash in circulation plus current corporate deposits, climbed 21.9 percent from a year earlier to 24.43 trillion yuan, down 1.0 percentage point from the end of July and 5.8 percentage points from the end of August last year.

The pickup of M2 from July indicates China's economic slowdown is not as rapid as expected, Liu said, adding that there is a slim possibility the central bank will raise lending rates before the economy fully recovers.