The nation’s money supply has maintained a “golden cross” for the 19th 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 signifies that annual growth of M1B has surpassed that of M2.
The M1B, a narrow measure of money in circulation, including currency and passbook savings deposits, rose 9.1 percent from the previous year, up from an 8.87 percent year-on-year increase in March and marking its highest level since January, the central bank said in its monthly report yesterday.
The broader M2 measure — which includes M1B, time deposits, foreign currency deposits and mutual funds — increased 6.24 percent last month compared with the same period the previous year, faster than the 5.89 percent increase posted a month earlier and marking the highest level in three years, the report said.
The nation last saw the year-on-year growth in the M2 money supply reach the same level in July 2011.
“Net foreign capital inflows of US$5 billion accelerated the year-on-year growth of M1B and M2 last month, evidence of sufficient liquidity,” Chen E-dawn (陳一端), deputy head of the bank’s economic research department, told a press conference.
The outstanding balance of securities accounts, which rose NT$24.7 billion from a month earlier to NT$1.383 trillion at the end of last month to its highest level ever, indicated investors’ bullish attitude toward the stock market.
In the first four months of this year, the average annual growth rates of M1B and M2 were 9.13 percent and 5.93 percent respectively, the central bank’s statistics showed.
The M2 growth is still within the central bank’s growth target of between 2.5 percent and 6.5 percent.
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