Wed, Nov 27, 2019 - Page 12 News List

Nation’s money supply shows liquidity for local exchanges, central bank says

By Crystal Hsu  /  Staff reporter

Money supply in the nation last month increased from a year earlier, reflecting ample liquidity on the local bourse, despite a tapering of the gap between the narrow and broad gauges, the central bank said on Monday.

Last month’s M1B — a measure of the amount of money in circulation in the nation — showed a 6.99 percent increase over October last year, but the pace of growth slowed from September’s 7.39 percent increase, the bank said.

The narrow monetary measure is widely used to track the liquidity momentum of the nation’s financial markets.

The balance of the nation’s securities account last month stood at NT$2.33 trillion (US$76.36 billion) — above the NT$2 trillion level for the second consecutive month, despite a decline of NT$600 million from a year earlier, the bank said.

The M1B of the past two months reflects the return of overseas investment to the local bourse after retreating to the sidelines in previous months due to concerns over US-China trade tensions, analysts said.

Cautious sentiment subsided last month after Washington and Beijing agreed to freeze tariff hikes and resume trade talks, the bank said, adding that daily stock turnover last month averaged NT$122.9 billion, a 12.24 percent increase over September’s NT$109.5 billion.

The broad money aggregate, or M2 — which includes the M1B, time deposits, foreign-currency deposits and mutual funds — advanced 3.79 percent, the biggest gain since July last year and faster than September’s 3.4 percent increase.

Capital inflows increased to US$4.28 billion from US$2.99 billion in September, indicating that foreign players have positive expectations for local corporate earnings, the bank said.

In the first 10 months of the year, M1B increased 7.09 percent and M2 increased 3.32 percent, within this year’s growth target of 2.5 to 6.5 percent, it said.

The bank said that it is considering updating the growth zone targeted for the nation’s money supply every two to three years, instead of making annual revisions.

The bank added that it intends to propose the policy revision at a quarterly board meeting on Dec. 19, with the change to take effect as early as January.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top