Monetary developments in the euro area: March 2024

26 April 2024

• Annual growth rate of broad monetary aggregate M3 increased to 0.9% in March 2024 from 0.4% in February
• Annual growth rate of narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, was -6.7% in March, compared with -7.8% in February
• Annual growth rate of adjusted loans to households stood at 0.2% in March, compared with 0.3% in February
• Annual growth rate of adjusted loans to non-financial corporations stood at 0.4% in March, compared with 0.3% in February

Components of the broad monetary aggregate M3

The annual growth rate of the broad monetary aggregate M3 increased to 0.9% in March 2024 from 0.4% in February, averaging 0.4% in the three months up to March. 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, was -6.7% in March, compared with -7.8% in February. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 16.9% in March from 18.8% in February. The annual growth rate of marketable instruments (M3-M2) increased to 19.2% in March from 17.5% in February.

Chart 1

Monetary aggregates

(annual growth rates)

Looking at the components' contributions to the annual growth rate of M3, the narrower aggregate M1 contributed -4.6 percentage points (up from -5.4 percentage points in February), short-term deposits other than overnight deposits (M2-M1) contributed 4.4 percentage points (down from 4.8 percentage points) and marketable instruments (M3-M2) contributed 1.0 percentage points (up from 0.9 percentage points).

Among the holding sectors of deposits in M3, the annual growth rate of deposits placed by households increased to 0.9% in March from 0.6% in February, while the annual growth rate of deposits placed by non-financial corporations increased to 0.1% in March from -1.2% in February. Finally, the annual growth rate of deposits placed by investment funds other than money market funds was -9.5% in March, compared with -6.7% in February.

Counterparts of the broad monetary aggregate M3

The annual growth rate of M3 in March 2024, as a reflection of changes in the items on the monetary financial institution (MFI) consolidated balance sheet other than M3 (counterparts of M3), can be broken down as follows: net external assets contributed 3.3 percentage points (as in the previous month), claims on the private sector contributed 0.7 percentage points (up from 0.6 percentage points), claims on general government contributed -1.0 percentage points (up from -1.1 percentage points), longer-term liabilities contributed -2.2 percentage points (as in the previous month), and the remaining counterparts of M3 contributed 0.1 percentage points (up from -0.3 percentage points).

Chart 2

Contribution of the M3 counterparts to the annual growth rate of M3

(percentage points)

Claims on euro area residents

The annual growth rate of total claims on euro area residents stood at -0.2% in March 2024, compared with -0.3% in the previous month. The annual growth rate of claims on general government was -2.6% in March, compared with -2.8% in February, while the annual growth rate of claims on the private sector stood at 0.8% in March, compared with 0.7% in February.

The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan transfers and notional cash pooling) stood at 0.8% in March, compared with 0.7% in February. Among the borrowing sectors, the annual growth rate of adjusted loans to households stood at 0.2% in March, compared with 0.3% in February, while the annual growth rate of adjusted loans to non-financial corporations stood at 0.4% in March, compared with 0.3% in February.

Chart 3

Adjusted loans to the private sector

(annual growth rates)

Notes:

• Data in this press release are adjusted for seasonal and end-of-month calendar effects, unless stated otherwise.
• "Private sector" refers to euro area non-MFIs excluding general government.
• Hyperlinks lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.