The pace of money supply growth was slowing last month, but market liquidity remained abundant, the central bank said yesterday as it released its latest data on M1B and M2 monetary aggregates.
The central bank said both M1B and M2 saw reduced annual growth last month, with the former rising 17.92 percent year-on-year and the latter growing 4.18 percent, attributing the subdued increase to a higher base effect from last year.
“[But] liquidity was still abundant last month,” Chen E-dawn (陳一端), deputy chief at the central bank’s economic research department, told a media briefing, saying that last month’s balances of securities accounts reached NT$1.23 trillion (US$38 billion), up NT$58.5 billion from a month earlier.
M1B, a narrow measure of money supply that includes currency held by the public and deposits, reached NT$10.64 trillion, up NT$69 billion, or 0.66 percent, month-on-month, the central bank’s data showed.
The broader M2 monetary gauge, which includes M1B, time deposits, time savings deposits, foreign currency deposits and mutual funds, increased NT$130.2 billion, or 0.44 percent, from a month earlier to NT$29.83 trillion.
Chen attributed the monthly growth of money supply to inflows of foreign capital and increased bank lending, saying that a total of US$4.63 billion in foreign funds had been deposited in local accounts last month.
Balances of local currency accounts held by foreigners amounted to NT$210 billion, an increase of NT$10.9 billion from a month earlier, Chen said.
Foreign currency deposits, however, declined to NT$2.28 trillion, down NT$42.5 billion from a month earlier, as many investors canceled their contracts of foreign currency deposits last month because of the appreciation of the New Taiwan dollar.
In terms of direct and indirect finance, total outstanding loans and investments by major financial institutions rose 2.1 percent year-on-year last month, compared with revised 1.45 percent growth in March, central bank data showed.
“Bank lending saw evident signs of growth last month as demand for capital by local enterprises increased,” Chen said, adding that exports and imports grew substantially in the first four months of this year.
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