China's central bank said on Wednesday that the growth rate of M2, the broad measure of money supply, slowed down while M1, the narrow measure of money supply, accelerated.

 

Statistics released by the People's Bank of China, the central bank, showed that M2 grew 18.8 percent from the previous year to 30.45 trillion yuan by the end of February, 0.4 percent lower than that at the end of January.

 

By the end of February, M1 grew 12.4 percent from the previous year to 10.44 trillion yuan, or 1.8 percent higher than that at the end of January.

 

Money in circulation went up eight percent to reach 2.45 trillion yuan. Most of the money that was supplied to the market before the Spring Festival has been reclaimed. In February, money that had been reclaimed reached 482.8 billion yuan.

 

The money supply is the intermediate goal of the current monetary policy pursued by the central bank.

 

M1 is an antecedent index for a country's economic performance, reflecting the change in the amount of money in the hands of residents and enterprises, while M2 shows the demand of the whole of society and indicates possible inflation.

 

Bank figures also revealed that the outstanding yuan loans amounted to 20.1 trillion yuan at the end of February, up 14.1 percent from last year and 0.3 percentage points higher than that of the end of January.

 

Outstanding yuan deposits rose 19.7 percent at the end of February to 29.77 trillion yuan, 2.7 percent higher than that of the end of January.

 

(Xinhua News Agency March 16, 2006)