(Yicai) Aug. 14 -- Two key measures of China's money supply increased at a faster pace in July than in the prior month along with outstanding total social financing despite seasonal factors, mainly thanks to a supportive monetary policy and an improved financing environment.

M2, a broad gauge of money supply that covers cash in circulation and all deposits, jumped 8.8 percent to CNY329.94 trillion (USD46 trillion) at the end of July from a year ago, up from an 8.3 percent gain the month before, according to data released by the People's Bank of China yesterday.

M1, a narrow measure that covers cash in circulation and non-bank and non-government deposits, climbed 5.6 percent to CNY111.06 trillion (USD15.48 trillion), compared with 4.6 percent growth in June, the data also showed.

Total social financing reached CNY431.26 trillion (USD60.11 trillion) as of July 31, up 9 percent from a year earlier. The figure rose 8.9 percent in June and 8.7 percent in May.

Newly added social financing amounted to CNY1.13 trillion (USD157.5 billion) last month, up by CNY361.3 billion (USD50.3 billion) from the same period last year. That was less than the CNY1.5 trillion that chief economists polled by Yicai had expected.

Chinese economic polices emphasize coordinated action, combining government leverage and the real economy to keep the economy operating smoothly and ensure growth in credit demand, according to market authorities and experts.

From a longer-term perspective, sustained fiscal policy action -- making full use of the fiscal multiplier to pull up aggregate demand -- will help get the economy moving more fully, they noted.

The balance of Chinese yuan-denominated loans stood at CNY268.51 trillion (USD37.42 trillion) at the end of July, up 6.9 percent from a year ago, per the PBOC’s data. The experts believe this reflects the stable support that credit has been providing to the real economy.

China’s economic policy in the second half of the year will maintain continuity and stability, focusing on steadying employment, businesses, markets, and expectations, the experts predicted. The ongoing economic recovery and reasonable growth in effective credit demand will be well-supported, they added.

Editor: Futura Costaglione