Friday, 26 April 2013

Monetary Base Continues to Plummet, M2 and M3 Money Supply Growth Slows Down: Euro area Monetary Base & Money Supply (as of 31.03.2013)

The euro area money base continues to decline on a large scale according to figures from the ECB for the month of March. The base dropped €59.79 billion (4.18%) on previous month to end March on €1.369 trillion and is now more than €405 billion lower than the record base of €1.775 trillion reported in June of last year. Compared to same month last year the money base contracted by 21.86%, the biggest year on year (YoY) contraction ever reported (based on data since February 2000).

The M1 money supply increased 7.10% for the month compared to March last year, the largest YoY increase since August 2010.

The broader measures of money supply, M2 and M3, grew by 4.24% and 2.28% compared to March last year. During the last few months YoY growth rates have slowed down somewhat for both. As the money base keeps contracting, the increase in the broader measures of money supply is due to expansions of the money multipliers (see M1/Base and M2/Base multipliers in the table below).

For more information see "MONETARY DEVELOPMENTS IN THE EURO AREA: MARCH 2013" by the ECB.

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