Taiwan's Money Supply Sees 18th Consecutive Monthly ‘Golden Cross' in March 2014

The annual growth of Taiwan's two major money supply indicators—M1B and M2—rebounded to 8.87% and 5.89%, respectively, due mainly to massive net inflow of US$3.247 billion in foreign funds, according to the central bank.

In March the annual growth of M1B was higher than that of M2 for the 18th consecutive month since October 2012, to form the so-called “golden cross”,  with the gap between the two reaching 2.98 percentage points, down 0.02 of a percentage point from a month earlier.

In the first quarter of this year, the annual growth of M1B was 9.14% and that of M2 was 5.82%, with the former remaining higher than the latter. In the same quarter, the net inflow of foreign funds totaled US$4.77 billion, almost double last year's corresponding figure of US$2.428 billion.

At the end of March the outstanding NT dollar deposits held by foreigners in the banking system here came to NT$204.1 billion (US$6.8 billion) and the outstanding value of stock accounts increased by NT$42.3 billion (US$1,41 billion) from a month earlier to NT$1.3585 trillion (US$45.28 billion), a new high in two years.

Thanks to sharp rise of renminbi deposits in March, Taiwan's foreign exchange reserves grew to NT$3.6779 trillion (US$122.66 billion) at the end of the month for a monthly increase of NT$144.3 billion (US$4.31 billion). (JL)