At the transitional period， China’s enterpises，residents and government organs have each become money demand entities， the velocity of money circulation experienced a sharp fall at first and then be－came stable． and a severe oversupply of money occurred． China’s base money supply at the transitional pe－riod embodies a typical endogenous nature． From a long perspective， the money multiplier tends to become greater at first and then stable． The movement tendencies of money supply and demand have had a deep influence on the execution of moderately tight monetary policy