Eurozone M3 Growth Improves In February; Lending To Businesses Rise

Eurozone’s M3 money supply annual growth improved in February after slowing in the previous month, figures from the European Central Bank showed on Thursday.

M3, a measure of broad money supply, grew 4.3 percent year-on-year in February following a 3.8 percent increase in January. In December, M3 rose 4.1 percent.

Economists had forecast M3 growth of 3.90 percent.

The annual growth of the narrower monetary aggregate M1, which comprises of currency in circulation and overnight deposits, accelerated to 6.6 percent from 6.2 percent.

Loans to households increased 3.3 percent annually, which was slightly faster than the 3.2 percent growth in January.

Growth in lending to non-financial businesses improved strongly to 3.7 percent from 3.4 percent. In December, loans to businesses increased 3.9 percent.

“Fears of lower business confidence causing a squeeze in borrowing, therefore, seem to be somewhat overdrawn, but the credit impulse does continue to slow as growth in bank lending has plateaued,” ING economist Bert Colijn said.

“This means that lending isn’t supportive of a pickup in growth in the months ahead.”

Earlier this month, the ECB announced that it will relaunch a scheme of offering long-term loans to banks at cheaper rates.

The targeted lending measure called the TLTRO III is aimed to boost credit to the real economy and thus, the transmission of the benefits of ultra-low interest rates.

The material has been provided by InstaForex Company – www.instaforex.com

Source:: Eurozone M3 Growth Improves In February; Lending To Businesses Rise