PRESS RELEASE Apr 25th, 2001
FINANCIAL CONDITIONS

March 2001

Monetary Aggregates For the month of March 2001, the annual growth rates of the monetary aggregates M1A, M1B and M2, measured on a daily average basis, were -6.12%, -5.51%, and 5.43%, respectively. The annual growth rates of M1B and M2 went down, mainly due to the sluggish stock market, the decline in foreign capital inflows, and the decelerating growth of loans and investments. For the first three months of this year, M2 exhibited an average annual growth rate of 6.04%, which was within the 5 % to 10% target range.

Deposits and Loans & Investments At the end of March, the annual growth rate of total deposits in major financial institutions, including monetary institutions and the Postal Savings System, declined to 5.30% from 6.08% at the end of February, as a result of the higher base at the end of March in the previous year when transactions in the stock market were robust. The annual growth rate of total loans and investments also went downward from 2.13% to 1.41%, mainly owing to the sluggish domestic economy and the weak fund demand from enterprises. In addition, the bearish stock market prompted depositors to purchase bond funds, which caused banks to decrease their holdings of securities in order to cope with deposit withdrawal. If banks' reclassifying nonaccrual loans and writing-off bad loans, loans and investments extended by life insurance companies and investment and trust companies, as well as the funds raised directly from financial markets were taken into account, the total funds raised by non-financial sectors showed an annual growth rate of 4.72% for the month, reaching an average of 4.94% for the first three months of this year.

Call-loan Rate and Reserve Conditions The average overnight call-loan rate for the month declined from 4.517% to 4.360%. This was mainly influenced by the Bank lowering both the rediscount rate and the rate on accommodations against secured loans by 12.5 basis points on March 6 and March 30. For the month as a whole, the average free reserves of depository institutions and the Postal Savings System were NT$5.9 billion.