10.26.2001
Money supply gaining momentum

• M2 grew 6.2% in Sept. Although this is lower than the 6.5% in Aug., it is still within the Central Bank’s growth target of 5 - 10%. Meanwhile M1b rose 0.3% YoY, resuming positive growth for the first time since Feb. Liquidity conditions have been improving since the April trough. Contributing to the improvement was a drop in foreign currency deposits to a five-month low of NT$1.143tn (US$33bn) last month, after peaking at NT$1.262tn in July. Also in Sept., demand deposits posted positive growth for the first time in nine months with 3.7%, as saving rates continue to fall. The interest rate on one-year saving deposits now stands at 3.2%, down from 5.1% in January.