Tue, Nov 26, 2013 - Page 13 News List

Money supply picked up last month

By Amy Su  /  Staff reporter

The annual growth of M1B and M2 money supplies last month both rose from a month earlier mainly on the back of net foreign capital inflows, in line with the central bank’s attempt to support the nation’s economy with loose monetary policy.

M1B rose by 8.58 percent from a year ago, up from an 8.05 percent year-on-year increase in September, the central bank said yesterday.

The broader M2 measurement increased by 5.99 percent last month compared with the same period last year, higher than the 5.54 percent increase a month earlier, the central bank said in its monthly report. Net inflow of foreign portfolio investors stood at a relative strong level of US$3.16 billion last month, a major factor driving up M1B and M2, the bank said.

The M2’s year-on-year 5.99 percent increase marked its fastest pace since August 2011 and fell within the target growth zone for M2 money supply at between 2.5 percent and 6.5 percent set for this year.

While some raised concerns over excessive liquidity in Taiwan, Chen E-dawn (陳一端), deputy head of the bank’s economic research department, shrugged off the worries.

“The soft economy warranted a loose monetary policy,” Chen told a media briefing.

For the first 10 months of the year, the average annual growth rates of M1B and M2 were 6.99 percent and 4.55 percent respectively, central bank data showed.

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