Money Supply Up $1.3 Billion

NEW YORK — The nation’s basic money supply rose by $1.3 billion in mid-May, the Federal Reserve Board reported Thursday. Analysts said the increase in M1 was slightly above expectations.

The Fed said M1 rose to a seasonally adjusted $656 billion in the week ended May 12 from $654.7 billion in the previous week.

For the latest 13 weeks, M1 averaged $641.9 billion, a 10% seasonally adjusted annual rate of gain from the previous 13 weeks.

The Fed has said it would like to see M1 grow in a range of 3% to 8% from the fourth quarter of 1985 through the final quarter of 1986.

In other reports:

- The Federal Reserve Bank of New York reported that commercial and industrial loans at major New York City banks rose $4 million in the week ended May 14, compared to a decline of $35 million a week earlier.

- The Federal Reserve said bank borrowings from the Federal Reserve System averaged $256 million in the two-week maintenance period, down from $344 million in the previous two-week period. Borrowings from the Fed averaged $277 million in the week ended Wednesday, up from $235 million in the previous week.

- The Federal Reserve said total adjusted reserves of member banks averaged $48.375 billion, up from $48.076 billion in the previous two-week period.

- The Federal Reserve said free reserves totaled $483 million in the two weeks ended Wednesday, down from $534 million in the previous two-week period.