The nation’s monetary aggregates posted modest gains last month because of net capital inflows and relatively low base figures a year ago rather than rising economic activity, the central bank said yesterday.
The M2 money supply measure rose 7.17 percent year-on-year last month, while the M1B recovered to positive growth of 1.79 percent, Yen Tzung-ta (嚴宗大), head of central bank’s economic research department, said at a press briefing.
The narrower M1B monetary index only gauges currency held by the public and demand deposits. The M2 is the broadest money supply measure and includes time deposits, time savings deposits, foreign currency deposits and mutual funds as well as M1Bs.
Yen attributed the growth in both measures chiefly to seasonal adjustments normally seen over the Lunar New Year holiday, when demand for liquidity shot up.
“The fact that the holidays fell in January this year rather than in February as they did last year accounted for the increase in monetary aggregates,” Yen said.