Sat, Apr 26, 2014 - Page 14 News List

‘Golden cross’ stays in place for 18th consecutive month

By Amy Su  /  Staff reporter

The nation’s money supply has maintained a “golden cross” for the 18th consecutive month, in light of faster annual growth of the M1B and M2 money supplies last month, which the central bank said was a sign of sufficient liquidity in the market.

A golden cross emerges when the annual growth of M1B surpasses that of M2.

The M1B, a narrow measure of money in circulation, including currency and passbook savings deposits, rose 8.87 percent from the previous year, down from an 8.63 percent year-on-year increase in February, the central bank said yesterday.

The broader M2 measurement — which includes M1B, time deposits, foreign currency deposits and mutual funds — increased 5.89 percent last month compared with the same period the previous year, lower than the 5.61 percent increase posted a month earlier.

“Net foreign capital inflows of US$3.25 billion accelerated the year-on-year rising pace of M1B and M2 last month, evidence of sufficient liquidity,” said the deputy head of the bank’s economic research department Chen E-dawn (陳一端).

The outstanding balance of securities accounts, which rose NT$42.3 billion from a month earlier to NT$1.36 trillion at the end of last month, the highest since March 2012, indicated investors’ bullish attitude toward the stock market.

In the first three months of this year, the average annual growth rates of M1B and M2 were 9.14 percent and 5.82 percent respectively, statistics showed.

The M2 growth is within the central bank’s growth target of between 2.5 percent and 6.5 percent.

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