China's central bank said on Sunday that M2, the broad measure of money supply, grew 17.57 percent year-on-year to 29.88 trillion yuan by the end of December last year, or 2.94 percentage points higher than that at the end of the previous year.

Statistics released by the People's Bank of China, the central bank, also showed by the end of December, M1, or the narrow measure of money supply, grew year-on-year 11.78 percent to 10.73 trillion yuan.

Money in circulation went up 11.94 percent to reach 2.4 trillion 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.

China has set a 15-percent target for money supply growth in 2005 to fuel its booming economy on the one hand and rein in the growth of some overheated sectors on the other.

It expects a 16-percent growth for M2 and a 14-percent growth for M1 in 2006, according to the bank.

Bank figures also revealed that the outstanding yuan deposits rose 18.95 percent year on year by the end of December to 28.72 trillion yuan.

The total yuan deposits increased by 4.39 trillion yuan in 2005, up 18.95 percent, the bank said.

The outstanding yuan loans amounted to 19.5 trillion yuan in December, up 12.98 percent year on year.

Last year's total yuan loans increased by 2.35 trillion yuan, or 87.1 billion yuan more than that of 2004. The result is reportedly within the macro-control target set by the central bank in early 2005.

China will continue to pursue a prudent monetary policy in 2006, according to a central bank's meeting convened in Nanchang in East China's Jiangxi Province on Jan. 5.

Source: Xinhua