Reduced growth in money supply
Banking and financial markets
m2, The money supply M2, money, notes and coins, assetsFinancial indicators, Banking and financial markets

The money supply M2May 2008



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Reduced growth in money supply

The twelve-month growth in total money supply fell from 13.9 per cent to 10.7 per cent to end-May, the lowest annual growth since March 2006.

The money supply amounted to NOK 1 433 billion at end-May, down from NOK 1 442 billion at end-April. The sharp decline in the annual growth to end-May is a result of both the decline in May this year and the sharp growth in May 2007.

Money supply (M2) - growth

Declining growth for non-financial enterprises

Non-financial enterprise money supply amounted to NOK 489 billion at end-May. The twelve-month growth was 7.2 per cent, down from 11.2 per cent to the previous month. The growth rate has been decreasing since December 2006, when it reached 35.5 per cent. Apart from March this year, when the growth was 7.8 per cent, we must back to April 2005 to find yearly rates below 10 per cent.

Slowdown also in household money supply growth

At end-May more than half (NOK 744 billion) of the broad monetary aggregate was owned by households. The twelve-month growth in household money supply fell from 10.2 per cent to 9.6 per cent during May. Households have been the main contributor to annual growth in money supply for five consecutive months, accounting for about 46 per cent of the growth. The growth in household money supply was a little lower than the growth in household gross debt (10.3 per cent) to end-May, as shown by the credit indicator C2 . For more information on the financial position of households, see the financial accounts in the national accounts .

Monetary aggregates, growth.
Per cent
  March 2008 April 2008 May 2008
M0 - 12 mth -3.9 10.7 22.2
M1 - 12 mth 6.1 7.6 5.0
M2 - 12 mth 11.1 13.9 10.7
M2 - 3 mth mov.avg. 6.2 1.2  

Composition of money supply

The broad monetary aggregate M2 amounted to NOK 1 433 billion at end-May, of which the major part (89 per cent) consisted of bank deposits. In comparison, notes and coins only accounted for 3 per cent of the broad money. The rest of the broad money mainly consisted of shares in money market funds (7 per cent), while certificates of deposits accounted for 1 per cent.

The money supply (broad monetary aggregate) M2 consists of notes and coins, unrestricted bank deposits, certificates of deposit and units in money market funds owned by households, non-financial enterprises, municipalities and financial enterprises other than state lending institutions, banks and money market funds.