Financial Conditions (August 2005)
PRESS RELEASE Release Date: September 26, 2005
Financial Conditions (August 2005)
Monetary Aggregates For the month of August 2005, the annual growth rates of the monetary aggregates M1A, M1B, and M2, measured on a daily average basis, were 7.76%, 7.59%, and 6.52%, respectively. The M1A growth rate was higher than that in the previous month mainly because a public enterprise transferred its employee pension funds from time deposits to demand deposits to meet the payment needs arising from privatization, while the M1B growth fell due to the increase in local residents’ investment in foreign financial assets. The higher M2 growth rate was mainly attributed to the Taiwan Development and Trust Corporation’s (TDTC’s) sale of its trust business to a domestic bank, which turned the TDTC’s former trust funds into bank time deposits. After adjusting for the sale, the growth rate of M2 was 6.46%. For the first eight months of this year, M1A, M1B, and M2 exhibited average annual growth rates of 8.21%, 7.71%, and 6.15%, respectively.
Reserve Money The daily average reserve money in August was NT$1,791.9 billion, an increase of NT$12.0 billion from the previous month. Of the components, currency in circulation decreased by NT$3.9 billion while reserves deposited with the Bank increased by NT$15.9 billion. The annual growth rate of the daily average reserve money in August was 8.77%, edging down 0.01 of a percentage point from 8.78% in the previous month.
Direct and Indirect Finance At the end of August, the annual growth rate of total outstanding loans and investments of major financial institutions, including monetary institutions, the Chunghwa Post Co., as well as money market mutual funds, rose from 7.29% in the previous month to 7.44%. This was mainly due to the increase in claims on private sector. After adjusting for the sale of trust business by the TDTC to a bank, the growth rate became 7.36%. If (1) loans and investments extended by life insurance companies and investment and trust companies, (2) non-accrual loans reclassified and bad loans written-off by major financial institutions, and (3) funds raised directly from capital markets were all taken into account, the total outstanding amount of funds raised by non-financial sectors showed an annual growth rate of 6.90%, higher than the 6.52% posted in the previous month.
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Notes: 1. The upcoming Financial Conditions (September 2005) is scheduled for release at 16:20 on October 25, 2005.
2. For the release schedule for the next six months, please check the CBC website at http://www.cbc.gov.tw/EngHome/ESSDS/calacal.htm.