Central Bank of China

PRESS RELEASE Release Date: July 25, 2001




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FINANCIAL CONDITIONS (June 2001)

Monetary Aggregates For the month of June 2001, the annual growth rates of the monetary aggregates M1A, M1B and M2, measured on a daily average basis, were -6.75%, -4.21%, and 6.01%, respectively. The annual growth rate of M1A went down continually mainly due to the slowdown of the economy, sluggish stock market, and thus the decrease in passbook deposits. However, the M1B growth rose owing to the lower base of the corresponding month of the previous year. The M2 growth also moved upward because of the increase in loans and investments. For the first half of this year, M2 exhibited an average annual growth rate of 5.79%.

Deposits and Loans & Investments At the end of June, the annual growth rate of total deposits in major financial institutions, including monetary institutions and the Postal Savings System, rose to 6.15% from 5.49% at the end of May. The annual growth rate of total loans and investments also went upward from 0.45% to 0.84%, largely due to banks' policies to promote loans with the approach of the banks' settlement day for the first half of the year. If major financial institutions' reclassifying nonaccrual loans and writing-off bad loans, loans and investments extended by life insurance companies and investment and trust companies, as well as funds raised directly from financial markets were taken into account, the total funds raised by non-financial sectors showed an annual growth rate of 3.88% for the month, contributing to an average of 4.51% for the first half of this year.

Call-loan Rate and Reserve Conditions In spite of the placement of tax in the Treasury account with the Bank and the increase in demand for foreign currency deposits, the average overnight call-loan rate for the month continued to trend downward from 4.037% to 3.895%. This was mostly influenced by the Bank's repurchase agreements operations, as well as the Bank lowering the discount rate, the rate on accommodations with collateral and the rate on accommodations without collateral by 25 basis points to 3.50%, 3.875% and 5.75%, respectively, on June 29. For the month as a whole, the average free reserves of depository institutions and the Postal Savings System were NT$5.8 billion.

Table 1. Financial Conditions ( June 2001 )[EXCEL][PDF]

Table 2. Factors Contributing to Changes in Monetary Aggregate M2 ( End of June 2001 )[EXCEL][PDF]