(Yicai) Nov. 12 -- Two key gauges of China’s money supply picked up last month as M2 grew quicker and M1 slowed its pace of shrinking for the first time in the past six months, following stimulus measures such as interest rate cuts.

As of Oct. 31, the balance of M2, a broad gauge that covers cash in circulation and all deposits, stood at CNY309.71 trillion (USD42.84 trillion), up 7.5 percent year-over-year, accelerating the pace of increase from a 6.3 percent boost a month earlier, according to the latest data from the People's Bank of China.

The balance of M1, a narrow measure of money supply that covers circulating cash and non-bank and non-government deposits, fell 6.1 percent on year to CNY63.34 trillion (USD8.76 trillion), an improvement over the 7.4 percent decline reported in September.

In a bid to stimulate the economy, the PBOC, the National Administration of Financial Regulation, and the China Securities Regulatory Commission released a series of policies on Sept. 24. These included cutting the reserve requirement ratio by 50 basis points and lowering the seven-day reverse repo rate by 20 basis points.

The faster growth in M2 in October reflects a shift of funds from bond and wealth management products back to bank deposits, experts noted. Banks also increased lending to non-banking financial institutions such as securities and fund companies. Additionally, fiscal spending accelerated, converting more fiscal deposits into corporate deposits.

M1 may stabilize as recent policies begin to take effect, the analysts added.

The balance of yuan-denominated loans rose 8 percent to CNY254.1 trillion. The scale of social financing, a broad measure of credit and liquidity in the economy, jumped 7.8 percent to CNY403.25 trillion, slightly below the previous month’s 8 percent growth, primarily due to base effects.

An insider said to Yicai that the high base resulted from local governments’ accelerated issuance of special refinancing bonds, exceeding CNY1 trillion (USD138.3 billion) that month to pay down older debt, which had temporarily boosted social financing.

Editors: Xu Wei, Emmi Laine