The money supply M2, June 2007

Household money supply amounted to NOK 723 billion at end-June. The growth in household money supply is still considerably lower than the growth in household gross domestic debt (12.1 per cent), as shown by the credit indicator C2 . For more information on the financial position of households, see the financial accounts in the national accounts

Total money supply (M2) declines

The twelve-month growth in money supply (M2) was 15.4 per cent in June, down from 16.2 per cent in the previous month. The broad monetary aggregate M2 amounted to NOK 1 354 billion at end-June, of which the major part (about 90 per cent) was bank deposits. In comparison, notes and coins only amounted to 3-4 per cent of the broad money. The rest of the broad money mainly consisted of shares in money market funds (about 6 per cent), while certificates of deposits amounted to less than 1 per cent.

Non-financial enterprises and municipalities pull growth down

Non-financial enterprise money supply amounted to NOK 474 billion at end-June. The twelve-month growth was 26.1 per cent, down from 29.6 per cent in the previous month. Since the beginning of 2006, non-financial enterprises have been the main contributor to the total growth in money supply, accounting for about 54 per cent of this growth at end-June. The high growth may be related to the high turnover and profitability in business and industry. As described by the credit indicator C2 , the growth in enterprise gross debt was also high (20.9 per cent).

The municipal sector contributed to dampen the growth in total money supply. Municipalities’ money supply amounted to NOK 61 billion at end-June. The twelve-month growth was 19.3 per cent, down from 23.7 per cent in the previous month.

Increase for other financial enterprises

Financial enterprises (other than state lending institutions, banks and money market funds) money supply amounted to NOK 96 billion at end-June. The twelve-month growth was 20.7 per cent, up from 16.9 per cent in the previous month.

Revisions

Since March 2007, the figures have been affected by the implementation of the IFRS, the new international financial reporting standards.