The annual growth in the M1B and M2 money supply rebounded last month due to steady growth in bank loans to fund investments by local companies, the central bank said yesterday.
M1B, a narrow measure of money supply indicating capital momentum in the stock market, rose 9.4 percent from a year ago, up from a 9.35 percent year-on-year increase in January, the central bank said.
“Currency in circulation rose last month on the back of rising investment in facilities by local companies,” deputy chief of the bank’s economic research department Chen E-dawn (陳一端) told a media briefing.
The seasonal demand for funds by companies to distribute their year-end bonuses also boosted liquidity and the growth in M1B, she said.
The broader M2 monetary measurement, which includes M1B, time deposits, savings deposits, foreign currency deposits and mutual funds, increased 6.12 percent year-on-year last month and 0.53 percent month-on-month, bank data showed.
Since the annual growth rate in M2 has been closer to the bank’s target of between 2.5 percent and 6.5 percent, Chen said the central bank would monitor the situation and continue to introduce monetary market adjustment measures.
However, she did not elaborate on how the bank planned to keep the M2 growth rate under control, nor respond to reporters’ questions as to whether the central bank would raise the reserve ratio, which theoretically could lead to a lower year-on-year growth in the M2 money supply.
The latest bank data showed that foreign-held New Taiwan dollar deposits fell NT$28.7 billion to NT$235.6 billion (US$7.99 billion) last month from a month earlier, which Chen called net capital outflows from the local stock market.
Seasonally adjusted, M1B grew 9.89 percent from a year earlier last month, while M2 rose 6.26 percent year-on-year, the data showed.
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