07.26.2001
Liquidity conditions showing signs of stability

• Development: M2 rose 6.0% YoY in June, still at the lower end of the CBC’s target growth range of 5-10% for 2001. M1b continues to contract at a slower pace for the third consecutive month, falling 4.2% in June.

• Analysis: Contraction in M1b likely bottomed at -6.8% in April. Recovery in liquidity conditions will be slow but should pick-up momentum once NT$ shows stability.

• Primasia View: It is encouraging that M1b is declining at a slower pace despite foreign currency deposits breaking a new record (NT$1.2tn end of June). Meanwhile, we expect continued weakening from the NT$ under CBC supervision.