Tuesday, 8 January 2013

Base Money in Norway for Nov-12 plummets 14.73%, Money Supply continues to increase

Base Money (M0) in Norway for the month of November 2012 plummeted 14.73% on October figures today released by Statistics Norway show. This further represented a drop of 26.71% compared to November 2011. At NOK 86.952 bn it was the second lowest value for base money reported in 2012 (after August 2012 when it stood at NOK 80.630 bn) and is currently 13.6% higher than the average value since December 1995. Compared to the U.S. and Euro Area, the growth in the money base for Norway has hence been relatively modest.

M1 and M2 money supply continue to grow at a substantially higher long term pace than the base. For the month of November, M1 money supply increased 1.27% on previous month and 4.27% on November 2011 while M2 money supply increased 1.10% on previous month and 4.40% on November 2011. The latest figures also show that M1 is currently 67.7% higher than the average value since December 1995 while the M2 is 68.2% higher. A likely reason for the contraction in base money for the month was the rapid increase in the growth rate of the M1/M0 and M2/M0 ratios which ended the month on 42.26% and 42.45%. Without this contraction in base money the growth rate of M1 and M2 therefore could have been substantially higher.

On a YoY percentage change basis, smoothed over 12 months, base money declined 7.68% for the month while M1 and m2 increased 4.08% and 4.32%, respectively.

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