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Monetary developments in the euro area: July 2018

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28 August, 2018
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ECB/Monetary developments in the euro area/July 2018

  • Annual growth rate of broad monetary aggregate M3 decreased to 4.0% in July 2018 from 4.5% in June (revised from 4.4%)
  • Annual growth rate of narrower aggregate M1, comprising currency in circulation and overnight deposits, decreased to 6.9% in July from 7.5% in June
  • Annual growth rate of adjusted loans to households stood at 3.0% in July, unchanged from previous month
  • Annual growth rate of adjusted loans to non-financial corporations stood at 4.1% in July, unchanged from previous month

Components of the broad monetary aggregate M3
The annual growth rate of the broad monetary aggregate M3 decreased to 4.0% in July 2018 from 4.5% in June, averaging 4.1% in the three months up to July. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, decreased to 6.9% in July from 7.5% in June. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) was -1.1% in July, compared with -0.9% in June.
The annual growth rate of marketable instruments (M3-M2) was -3.1% in July, compared with -2.0% in June. Looking at the components’ contributions to the annual growth rate of M3, the narrower aggregate M1 contributed 4.5 percentage points (down from 4.8 percentage points in June), short-term deposits other than overnight deposits (M2-M1) contributed -0.3 percentage point (as in the previous month) and marketable instruments (M3-M2) contributed -0.2 percentage point (down from -0.1 percentage point). From the holding sector perspective, the annual growth rate of M3 deposits placed by households increased to 4.7% in July from 4.5% in June, while the annual growth rate of M3 deposits placed by non-financial corporations decreased to 4.4% in July from 4.9% in June. Finally, the annual growth rate of M3 deposits placed by non-monetary financial corporations (excluding insurance corporations and pension funds) decreased to 1.9% in July from 6.7% in June.

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