China's money supply continued to grow in January, said the People's Bank of China (PBC), the central bank, on Thursday.

By the end of January, the broad measure of the money supply, M2, which covers cash in circulation and all deposits, grew 15.9 percent year-on-year to 35.2 trillion yuan.

Statistics released by the central bank, said the newly-added renminbi-denominated deposit in Jan. amounted to 24.9 billion yuan, 671.6 billion yuan fewer than that of the previous year.

The bullish stock market is attracting more fund from ordinary people, analysts said.

By the end of January, said the central bank, the narrow measure of the money supply, or M1, grew year-on-year 20.2 percent to 12.9 trillion yuan, with the growth rate 2.7 percentage points higher than the previous year.

Money in circulation dropped 4.6 percent to 2.8 trillion yuan, said the 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 indicated that the outstanding renminbi-dominated deposits rose 16.8 percent year on year by the end of January to 34 trillion yuan.

The outstanding renminbi-dominated loans amounted to 23.1 trillion yuan in January, a rise of 16 percent year on year.

(Source: Xinhua News Agency February 16, 2007)