M3 Money Supply YoY

M3 Money Supply YoY is the annual percent change in broad money, published monthly by the ECB, the euro area central bank. It starts with the January 1999 reference month. Issuers are MFIs, namely central banks, deposit-taking banks and money market funds, plus certain central government accounts. Holders are euro area residents other than MFIs and the central government, including households, non-financial firms, non-bank firms, and state, local and social security funds.

It is not lending or inflation, nor central government or non-resident holdings, nor longer-term bank liabilities over 2 years. The ECB keeps a 4.5% reference value as a medium-term benchmark for price stability, not a target that forces action. The series always refers to the euro area countries that had adopted the euro at the reference date.

National central banks collect end-month stocks and send them by the 15th working day, with no national release before the ECB release. The ECB publishes Monetary developments 12 times a year on the 19th working day after the reference month at 10:00 CET. The date moves if it clashes with a Governing Council meeting, and all dates are pre-announced.

Each release shows headline growth with a 3-month average, component contributions, deposits by sector, counterparts and credit splits. Data are seasonally and calendar adjusted unless stated; revisions update the prior period routinely or earlier periods exceptionally with advance notice and a note.

M3 growth reflects shifts among cash, deposit and marketable parts plus balance sheet counterparts that fund or absorb money, with no fixed weights.

• Currency in circulation: banknotes and coins used at once for payment.
• Overnight deposits: bank balances usable at once for payments or cash withdrawal.
• Short-term deposits other than overnight: deposits with agreed maturity up to 2 years or redeemable at notice up to 3 months. They convert with delay or penalty.
• Repurchase agreements: short-term secured deals that act like deposits, excluding euro area central counterparty repos since June 2010.
• Money market fund shares/units: fund holdings that offer cash-like value and quick access.
• Short-term debt securities: MFI-issued debt securities with original maturity up to 2 years that trade easily at stable prices like deposits.

In the November 28, 2023 release for October 2023, M3 fell 1.0% after a 1.2% fall in September. It averaged a 1.2% fall over the 3 months to October. Narrow M1 fell 10.0% and subtracted 7.2 points, while short deposits excluding overnight rose 21.4% and added 5.1 points. Marketable paper rose 22.9% and added 1.1 points, as savers left overnight cash for paid time deposits and paper.

Net external assets added 2.5 points and private credit added 0.4 points, while government credit subtracted 1.0 points. Longer-term liabilities subtracted 2.3 points and the rest subtracted 0.5 points. Money shrank even as private credit grew 0.4% and adjusted loans grew 0.4%, as households and firms left overnight deposits.

1. Transactions: subtract reclassifications, revaluations and exchange rate moves from stock change to keep only real flows, counted net of repayments and sales.

1. Notional index: chain a base 100 index from each month flow ratio, so it cumulates only transaction change. For example 20bn on 16000bn lifts 100 to 100.125.

1. Yearly rate: divide the index by its value 12 months earlier minus 1 times 100. If the index reaches 103.5 after 12 months, the rate is 3.5%.

1. Seasonal adjustment: clean calendar and seasonal swings with X-12 or X-13 methods on the transaction index, building M3 by adding its adjusted parts. Calendar effects include trading-day and Easter effects, and euro area enlargement moves enter as reclassifications.

1. Contributions: split the headline rate into additive points from components and counterparts for each release.