Taipei, July 2, 2009 (CENS)--The annual growth of Taiwan`s two major money supply indicators-M2 and M1B-formed a "golden cross" in April, with the latter posting a higher increase than the former, while demand deposits witnessed a sharp monthly rise of NT$241.1 billion (US$73.06 billion at US$1 = NT$33) in May, significantly helping to fuel the stock and real estate markets.

As a result, the outstanding home loans extended by banks in Taiwan increased by NT$23.3 billion (US$706.06 million) from a month earlier to hit a record high of NT$4.735 trillion (US$143.48 billion) in May. However, the five government-linked banks, namely Bank of Taiwan, Taiwan Cooperative Banks, Land Bank of Taiwan, Hua Nan Commercial Bank, and First Commercial Bank, together granted NT$41.095 billion (US$1.25 billion) in shelter loans in May, edging down NT$1.312 billion (US$39.76 million).

Officials of the central bank here indicated that the surge in home loans was mainly triggered by the NT$200 billion (US$6.06 billion) low-interest lending program offered by the government to finance house purchases, not to mention the recent active promotion of housing loans by private banks.

Besides, the outstanding construction loans saw a monthly fall of NT$17 billion (US$515.15 million) to NT$1.016 trillion (US$30.79 billion) in May, the lowest of its kind since August of 2007. Nevertheless, the officials believe that the declining construction loans may help balance the realty market supply and demand, as the market is still plagued by an oversupply.


(by Judy Li)