Central Bank says annual M1B, M2 growth increased

By Amy Su  /  Staff reporter

Wed, Jun 26, 2013 - Page 13

Annual growth in the nation’s M1B and M2 money supply increased last month mainly on the back of strong net inflows by foreign portfolio investors, the central bank said yesterday.

However, concerns over the end of US quantitative easing, which has led foreign investors to withdraw large amounts of capital, may have some negative impact on the growth of M1B and M2 money supply this month, the bank added.

M1B, a narrow measure of the money in circulation, including currency and passbook savings deposits, rose 7.04 percent from a year ago, compared with a 5.72 percent year-on-year increase in April, the bank said in its monthly report. The increase was the highest since August 2011, according to the central bank’s data.

The broader M2 monetary measurement — which includes M1B, time deposits, foreign currency deposits and mutual funds — increased 4.32 percent year-on-year last month, higher than the annual increase of 3.71 percent in April, the report said.

“The securities market performed well last month … with net inflow of foreign portfolio investors standing at the relatively strong level of US$2.99 billion,” Chen E-dawn (陳一端), deputy head of the bank’s economic research department, told a media briefing.