Singapore M3

The definitions of these monetary aggregates in Singapore are as follows:

M1 = Currency in Active Circulation + Private Sector Demand Deposits with Banks

M2 = M1 + Quasi-money

M3 = M2 + Net Deposits with Non-bank Financial Institutions (NBFIs). M3 is the liquid liabilities are also known as broad money.

Following its merger with DBS, POSBank became part of the banking system. Hence, its deposits are treated like those of other banks and are included in the money supply as part of M1 and quasi-money.

As a result, POSBank's current account deposits are now included in M1 as demand deposits while its savings and other deposits become components of quasi-money and, thus, part of M2. In M3, Net Deposits with NBFIs now comprise only finance companies' deposits less their own placements of deposits with banks to avoid double-counting.

Another revision to the money supply statistics is the treatment of the net deposits of POSBank in M3. Prior to Nov 98, POSBank, like other statutory boards, placed part of its cash with MAS as term deposits. These deposits had been netted off from its gross deposits when compiling M3.

Following its acquisition by DBS in Nov 98, POSBank's term deposits with MAS are now included as part of money supply in line with the institution-based approach described above. In order to avoid a break in the data series and facilitate the analysis of monetary trends, we have revised the historical data back to October 1982 when POSBank first placed such deposits with MAS.

The Singapore M3 money supply historical data.

Source: mas.gov.sg

2007 Update

The year-on-year M3 growth rate is a whopping 23.62% (June 2007 compared to June 2006). The GDP growth in Q2 2007 was 8.6%, and assuming we take gov.sg's word for that, this means that the total money supply is expanding at a rate of 23.62 / 8.6 = 2.7 times faster than the rate of expansion of the total economy of goods and services.

Monetary inflation is due to the rate of growth of the money supply being greater than the rate of growth of available goods and services in the economy, so this is highly inflationary.