Money supply in the nation, as measured by M1B and M2, last month logged gains of 14.18 percent and 8.26 percent respectively from a year earlier, suggesting ample liquidity, despite posting their lowest rises this year, the central bank said yesterday.
The increase in M1B, which refers to cash and cash equivalents, remained high, but fell for the sixth consecutive month to a 13-month low, the central bank said.
The narrow money supply gauge is widely used to measure money available for investment.
The securities account balance last month rose to NT$3.14 trillion (US$113.2 billion) as retail investors rejoined the local bourse, helping to account for the TAIEX’s healthy showing in terms of the index’s value and daily turnover, it said.
Individual traders made up 67.1 percent of deals on the market, up from 63.6 percent a month earlier, it added.
The increase in M2 — M1B, time deposits, time saving deposits, foreign currency deposits and mutual funds — also slowed to a low for the year, the central bank said, but foreign currency deposits rose 8.37 percent year-on-year to a record high of NT$7.3 trillion, bolstered by strong exports.
Exporters normally park account receivables in foreign currency deposits to meet payment needs later, it said.
The solid increase in foreign currency deposits is impressive in lieu of a high comparison base last year, the central bank said, attributing the uptrend to insatiable demand for Taiwanese technology products.
Foreign institutional investors, on the other hand, trimmed their deposits by NT$24.5 billion to NT$219.4 billion, although they increased their holdings in local shares by NT$21.8 billion, the central bank said.
It is common for foreign portfolio managers to wire money abroad as they require cash at this time of year, it said.
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