Dec. 15 (Bloomberg) -- China’s money supply grew at the weakest pace in more than three years, underscoring the challenge that the government faces in boosting liquidity to fuel growth.

M2, the broadest measure which includes cash and all deposits, rose 14.8 percent from a year earlier to 45.86 trillion yuan ($6.7 trillion) at the end of November, the People’s Bank of China said today on its Web site, after gaining 15 percent in October. The median forecast of 16 economists surveyed by Bloomberg News was for another 15 percent increase.

China aims to increase its money supply 17 percent in 2009 and encourage lending to boost domestic consumption and buoy growth in the world’s fourth-largest economy, the State Council said on Dec. 13. The central bank cut interest rates by the most in 11 years last month to counter a deepening slowdown.

“Monetary-policy easing measures will start to help but it will take some time,” said Sherman Chan, an economist with Moody’s Economy.com in Sydney. “The central bank has a lot of room to do more.”

The central bank has cut the key one-year lending rate to 5.58 percent from 7.47 percent in September. It has also lowered the proportion of deposits that lenders must set aside as reserves, scrapped temporary loan controls and sold fewer bills, to try to boost liquidity.

Smaller inflows of cash have limited money-supply growth. Exports fell for the first time in seven years in November and foreign direct investment declined 36.5 percent from a year earlier.

Outstanding local-currency loans rose 16.03 percent at the end of November from a year earlier, the central bank said. Lenders extended 476.9 billion of new yuan loans last month, taking the total to 4.14 trillion yuan for this year.

Outstanding local-currency deposits rose 19.94 percent at the end of November from a year earlier, the central bank said. Household savings climbed 382.7 billion yuan from the previous month.

To contact the reporter on this story: Nipa Piboontanasawat in Hong Kong at npiboontanas@bloomberg.net

Last Updated: December 14, 2008 22:46 EST