The latest statistics for the nation’s monetary aggregates showed an extended improvement last month from the previous month, reflecting a continuous increase in bank loans and investments, as well as the effect of a lower comparison base, the central bank said yesterday.
The M2 money supply indicator rose 2.74 percent last month from a year earlier, after the broadest measure of the nation’s monetary aggregates grew by 2.11 percent in August and 1.45 percent in July, the central bank’s tallies showed.
The latest M2 growth figure beat Citigroup economists’ forecast of a slower 1.8 percent growth for last month.
“The improvement was mainly due to accelerating growth of loans and investment from banks, which has offset the negative impact of capital outflow and declining equity performance,” Citi Investment Research economists Cheng Cheng-mount (鄭貞茂) and Tina Liao wrote in a client note yesterday.
M1B, another money supply gauge that includes currency held by the public and deposited money, also improved last month, registering a 4.89 percent decline from a year earlier, after a drop of 5.32 percent in August and a fall of 5.77 percent in July.
M2 includes M1B, time deposits, time savings deposits, foreign currency deposits and mutual funds.
The economists expected M2 to continue to improve next month on the central bank’s aggressive monetary liberalization last month and early this month, but said “the outlook for money growth is not very optimistic” because “foreign capital will likely continue to emigrate in the coming months and banks are likely to tighten credit.”
For the first nine months of the year, the M2 supply grew 1.85 percent compared to the same period last year, M1B dropped 2.83 percent year-on-year Neither last month’s M2 growth rate nor that of the first nine months fell within the central bank’s target range of 2 percent to 6 percent.
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