Monetary developments in the euro area: October 2022

November 28, 2022

Components of the broad monetary aggregate M3

The annual growth rate of the broad monetary aggregate M3 decreased from 6.3% in September to 5.1% in October 2022.^[1], averaging 5.8% in the three months to October. The components of M3 showed the following evolutions. The annual growth rate of the narrower aggregate M1, which includes currency in circulation and demand deposits, fell to 3.8% in October, from 5.6% in September. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) increased from 8.1% in September to 9.9% in October. The annual growth rate of negotiable instruments (M3-M2) declined from 7.8% in September to 3.2% in October.

Data for monetary aggregates

Looking at the component contributions to the annual growth rate of M3, the narrower aggregate M1 contributed 2.7 percentage points (vs. 4.1 percentage points in September), short-term deposits other sight deposits (M2-M1) for 2.2 percentage points (against 1.8 percentage points) and negotiable instruments (M3-M2) contributed 0.2 percentage points (against 0.4 percentage).

From the perspective of deposit-holding sectors in M3, the annual growth rate of deposits placed by households stood at 4.1% in October, compared to 4.2% in September, while the annual growth rate of deposits placed by non-financial corporations stood at 6.0% in October, against 5.9% in September. Finally, the annual growth rate of deposits placed by non-monetary financial corporations (excluding insurance corporations and pension funds) fell from 18.1% in September to 7.0% in October.

Counterparts of the broad monetary aggregate M3

Reflecting the evolution of the consolidated balance sheet items of monetary financial institutions (MFIs) other than M3 (counterparts of M3), the annual growth rate of M3 in October 2022 breaks down as follows: loans to the private sector contributed 5, 0 percentage points (vs. 5.5 percentage points in September), credit to general government contributed 1.9 percentage points (vs. 2.1 percentage points), longer-term financial liabilities contributed 0.2 percentage point (vs. 0.1 percentage point), net foreign assets contributed -1.1 percentage point (vs. -1.2 percentage point), and other M3 counterparts contributed – 0.8 percentage point (vs. -0.2 percentage point).

Data on the contribution of M3 counterparts to the annual growth rate of M3

Credit to euro area residents

As regards credit dynamics, the annual growth rate of total credit to euro area residents declined to 5.0% in October 2022, from 5.5% the previous month. The annual growth rate of claims on general government fell to 4.6% in October, after 5.0% in September, while the annual growth rate of claims on the private sector fell to 5.2% in October, after 5.7% in September.

The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan sales, securitization and notional cash pooling) fell to 6.5% in October, from 7.0 % in September. Among borrowing sectors, the annual growth rate of adjusted loans to households fell to 4.2% in October from 4.4% in September, while the annual growth rate of adjusted loans to non-financial corporations was to 8.9% in October, unchanged from the previous one. month.

Adjusted data on loans to the private sector

Remarks:

• The data in this press release are corrected for seasonal and calendar effects at the end of the month, unless otherwise stated.
• The “private sector” refers to euro area non-MFIs excluding general government.
• Hyperlinks in the main body of the press release and in accompanying tables lead to data that may change with subsequent releases due to revisions. The figures presented in the tables in the appendix are a snapshot of the data at the time of current publication.