To monetary policy. The People's Bank of China injected a large amount of liquidity into the money markets in July -- over one trillion yuan. Analysts say this could point to the possibility that another cut in the reserve requirement ratio for Chinese banks could be in the works. Chen Tong explains.

The banks had a reduction in their targeted reserve requirement ratios at the beginning of July which resulted in additional liquidity for the money markets of some 700 billion yuan. Then on top of that, the People's Bank of China put another 1.3 trillion yuan into the markets in July through methods including the medium-term lending facility and reverse repos. The central bank has been pushed to make these moves because of financing difficulties in the economy.

LI LIUYANG, CHIEF ANALYST CHINA MERCHANTS BANK "In the second half of this year, the macro economy activities are facing some uncertainties, especially after the US-China trade disputes already undergoing. So there are some worries in the market that the Chinese economy has lost some momentum. So the government has to do something to stabilize the aggregate demand and loans. So they use the MLF to inject liquidity into the market. So in July, there is totally over 1 trillion RMB has injected into the money market in the form of MLF. So that direct banks to make loans and buying some credit bonds of some lower credit sectors such as city investment sector such as SMEs and MMEs."

Overall lending growth from both banks and off-balance-sheet sources hit record lows for the four consecutive months through June. At the same time, China's M2 money supply growth also hit its lowest point since 1996. The sluggish financial situation may force the central bank to cut the reserve requirement ratio once again.

JIMMY ZHU, CHIEF STRATEGIST FULLERTON MARKETS "As what we see in the credit data and M2 data. M2 is 8 percent which is the lowest number in the past 20 years. Before the credit and M2 to pick up, we expect the PBOC will continue to lower triple R rates probably one more time, sometime around Sep and Oct. We think that will continue to put downward pressures on the Chinese yuan."