Monetary developments in the euro area: February 2021

25 March 2021

• Annual growth rate of broad monetary aggregate M3 decreased to 12.3% in February 2021 from 12.5% in January
• Annual growth rate of narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, stood at 16.4% in February, compared with 16.5% in January
• Annual growth rate of adjusted loans to households stood at 3.0% in February, unchanged from previous month
• Annual growth rate of adjusted loans to non-financial corporations increased to 7.1% in February from 6.9% in January

Components of the broad monetary aggregate M3

The annual growth rate of the broad monetary aggregate M3 decreased to 12.3% in February 2021 from 12.5% in January, averaging 12.4% in the three months up to February. 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, stood at 16.4% in February, compared with 16.5% in January. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) stood at 1.0% in February, compared with 1.1% in January. The annual growth rate of marketable instruments (M3-M2) decreased to 14.2% in February, down from 18.5% in January.

Data for monetary aggregates

Looking at the components' contributions to the annual growth rate of M3, the narrower aggregate M1 contributed 11.3 percentage points (as in the previous month), short-term deposits other than overnight deposits (M2-M1) contributed 0.3 percentage point (as in the previous month) and marketable instruments (M3-M2) contributed 0.7 percentage point (down from 0.9 percentage point).

From the perspective of the holding sectors of deposits in M3, the annual growth rate of deposits placed by households increased to 9.5% in February from 9.2% in January, while the annual growth rate of deposits placed by non-financial corporations decreased to 21.2% in February from 21.8% in January. Finally, the annual growth rate of deposits placed by non-monetary financial corporations (excluding insurance corporations and pension funds) decreased to 14.6% in February from 15.6% in January.

Counterparts of the broad monetary aggregate M3

As a reflection of changes in the items on the monetary financial institution (MFI) consolidated balance sheet other than M3 (counterparts of M3), the annual growth rate of M3 in February 2021 can be broken down as follows: credit to general government contributed 8.6 percentage points (up from 8.3 percentage points in January), credit to the private sector contributed 5.3 percentage points (down from 5.4 percentage points), longer-term financial liabilities contributed 0.5 percentage point (as in the previous month), net external assets contributed -0.7 percentage point (down from -0.4 percentage point), and the remaining counterparts of M3 contributed -1.5 percentage points (down from -1.3 percentage points).

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

Credit to euro area residents

As regards the dynamics of credit, the annual growth rate of total credit to euro area residents increased to 9.8% in February 2021 from 9.6% in the previous month. The annual growth rate of credit to general government increased to 23.9% in February from 22.9% in January, while the annual growth rate of credit to the private sector stood at 5.1% in February, unchanged from the previous month.

The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan sales, securitisation and notional cash pooling) stood at 4.5% in February, unchanged from the previous month. Among the borrowing sectors, the annual growth rate of adjusted loans to households stood at 3.0% in February, unchanged from the previous month, while the annual growth rate of adjusted loans to non-financial corporations increased to 7.1% in February from 6.9% in January.

Data for adjusted loans to the private sector

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 in the main body of the press release and in annex tables 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.