Printer Friendly

M2 money supply growth exceeds target range again in August.

Taipei, Sept. 25, 2009 (CENS) -- Taiwan's M2 money supply grew 8.17% year-on-year in August, the fifth straight month for the broadly defined money supply to score growth exceeding the target zone set by the Central Bank of China (CBC), said the CBC yesterday (Sept. 24).

The growth rate dropped slightly by 0.16 of a percentage point from the July level but still surpassed the CBC's targeted growth range of 2.5-6.5%. Moreover, M1B money supply, or money supply in narrower definition, jumped 22.14% year-on-year in August.

Still, the board of directors of the CBC resolved to maintain the targeted growth range for M2 money supply, as well as the policy interest rates, unchanged yesterday. The discount rate, therefore, remains at 1.25% per annum.

M1B includes currency in circulation, checking deposit, passbook deposit, and passbook savings deposit, while M2 equals M1B plus time deposit, time savings deposit, and transference from postal deposit.

Perng Fai-nan, CBC governor, expected the CBC to maintain the existing loose monetary policy at least by year end, citing the stable price outlook for the coming three months. He denied that the loose monetary policy is causing trouble, noting that M2 money supply growth rate is actually staying at a proper level.

The CBE reported that after the adjustment of seasonal factors, M2 growth in August actually reached only 6.37%, still falling within the targeted range. It predicted that the nominal growth rate will fall back within the targeted range by November.

Meanwhile, Perng attributed the sharp M1B growth to massive foreign investments in the stock market. The stock market rally has triggered massive fund transference from time deposit accounts to demand deposit accounts. In August, outstanding banking time deposit decreased by NT$170 billion, while that of demand deposit jumped NT$130 billion to NT$8.8 trillion, a record high.

Perng stressed that the CBC will closely monitor the prices of various assets and spare no effort in keeping money supply within the targeted range, via such measures as open market operation.

((PL)) (GE)

COPYRIGHT 2009 China Economic News Services
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2009 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:The Taiwan Economic News
Geographic Code:9TAIW
Date:Sep 25, 2009
Words:344
Previous Article:Taiwan EVs to become trillion NT dollar industry: Yulon CEO Yen.
Next Article:Interest rate of refinancing loans for THSRC unlikely to drop over 1%.
Topics:


Related Articles
Monetary policy report to the Congress.
REVISIONS TO THE MONEY STOCK DATA.
Money and financial markets.
An innovative money multiplier.
Where's all the money? U.S. money supply bulging, donors not giving.
Taiwan's two money supply indicators rise to new June high.
M1B surges 20% in July.
Taiwan's M1B money supply growth hits new high of 22.14% in August.
M1B growth topped 20% in Sept. for third straight month.
Taiwan's M1B money supply exceeds NT$10 trillion in October.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters