The broad M2 money supply, which includes cash in circulation and deposits, accelerated in October to 17.1 per cent from September's 16.8 per cent, according to figures released yesterday by the People's Bank of China.

The central bank's target for M2 growth in 2006 is 16 per cent.

The rebound came as a surprise to many as the money supply growth rate has been on a downward spiral since July, when it grew 18.4 per cent year-on-year.

"It is a little bit surprising to see the pace (of growth) picking up again," said Han Meng, an economist at the Chinese Academy of Social Sciences.

"And it shows that the central bank is fighting an uphill battle to rein in money, credit and investment growth as the country's foreign trade surplus is still mounting," the economist said.

The central bank has already taken a host of measures to curb money and credit growth since April, when there were signs that the economy was overheating.

Since then, it has twice increased the interest rate and ordered commercial banks to raise deposit reserve ratio.

On November 3, the central bank once again raised its deposit reserve ratio the proportion of deposits that banks must hold in the central bank.

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