Although annual growth in M1B money supply has rebounded for two consecutive months, recent stock market volatility could slow its growth this month.
M1B, a narrow measurement of money supply in circulation that includes currency and passbook savings deposits, rose 3.77 percent last month from the previous year, faster than the annual increase of 3.47 percent posted in March, the central bank said in its monthly report yesterday.
“The faster growth was mainly caused by the substantial -expansion in the daily average -enterprise passbook deposits last month, which decreased during the same period last year,” Chen E-dawn (陳一端), deputy head of the bank’s economic research department, told a press conference.
The broader M2 money supply — which includes M1B, time deposits, foreign currency deposits and mutual funds — increased 4.72 percent year-on-year last month, slower than the 5 percent annual growth in March, the report said.
The US$291 million net outflow of foreign capital was the major factor that dragged down last month’s growth in M2, Chen said.
The growth trend in M1B is -affected by the stock market’s performance and near-term business sentiment, Chen said.
The TAIEX has dropped 5.73 percent since the beginning of this month, with foreign investors selling a net NT$99.2 billion (US$3.35 billion) in shares, an indication that growth in M1B could start to fall again.
The balance in securities appreciation accounts, which represents the capital momentum of individual investors, also turned down, declining NT$47.7 billion from a month earlier to NT$1.31 trillion last month, the largest fall in five months, statistics showed.