China's outstanding loans to small businesses up 27.5% year-on-year by end-July

FILE PHOTO: Chinese 100 yuan banknotes are seen on a counter of a branch of a commercial bank in Beijing, China, March 30, 2016. REUTERS/Kim Kyung-Hoon

BEIJING (Reuters) - China’s outstanding loans to small businesses stood at 13.7 trillion yuan ($1.98 trillion) by the end of July, up 27.5% from a year earlier, the central bank said on Thursday.

Interest rates on those loans averaged 5.27% in July, 0.91 percentage points lower than a year ago, the People’s Bank of China said in a statement handed out ahead of a news conference in Beijing.

Prudent monetary policy will be more flexible and appropriate, the PBOC said, while market rates would be guided towards the rates on the medium-term lending facility (MLF) and open market operation (OMO).

Reporting by Ma Rong and Tony Munroe; Editing by Alison Williams