Taiwan's Money Supply Growth Weakens in May

The annual growth of Taiwan's two major money supply indicators—M1B and M2—registered at 8.14% and 5.91%, respectively, in May, both slightly less than the previous month. In the first five months M1B grew 8.93% and M2 5.92%, according to the Central Bank.

Over the past 20 months M1B has grown faster than M2, forming a so-called “golden cross” indicating that passbook deposits exceeded the total capital supply in the financial market. This situaiton helps drive rallies in the stock market.

At the end of May the outstanding value of stock trading accounts experienced a slight monthly drop of NT$300 million (US$10 million) to NT$1.3823 trillion (US$46.08 billion)--still a high amount for investment in the stock market. At the same time passbook deposits were down nearly NT$100 billion (US$3.33 billion) from a month earlier to NT$12.252 trillion (US$408.4 billion), while foreign-currency deposits hit a new high of NT$3.7591 trillion (US$125.3 billion). (JL)