PRESS RELEASE Release Date: June 26, 2001




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FINANCIAL CONDITIONS (May 2001)

Monetary Aggregates For the month of May 2001, the annual growth rates of the monetary aggregates M1A, M1B and M2, measured on a daily average basis, were -6.24%, -5.16%, and 5.61%, respectively. The annual growth rates went up from a month earlier mainly due to the significant increase in foreign capital inflows, and the lower base of the corresponding month of the previous year. For the first five months of this year, M2 exhibited an average annual growth rate of 5.75%.

Deposits and Loans & Investments At the end of May, the annual growth rate of total deposits in major financial institutions, including monetary institutions and the Postal Savings System, rose to 5.47% from 4.78% at the end of April. The annual growth rate of total loans and investments went downward from 1.17% to 0.40%. The decline was largely owing to the slowdown of the economy, which resulted in weak fund demand, as well as the maturity of the Treasury's short-term borrowing from banks. 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 4.13% for the month, contributing to an average of 4.63% for the first five months of this year.

Call-loan Rate and Reserve Conditions The average overnight call-loan rate for the month trended downward from 4.227% to 4.036%. In addition to the Bank's repurchase agreements operations, this was mostly influenced by the Bank lowering both the discount rate and the rate on accommodations with collateral by 25 basis points to 3.75% and 4.125%, respectively, on May 18. The rate on accommodations without collateral was also lowered to 6%. For the month as a whole, the average free reserves of depository institutions and the Postal Savings System were NT$8.8 billion.

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

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