On the other hand, the strong monetary growth may also reflect stimulus from the low level of short-term interest rates. This can be seen from the fact that the most liquid components of M3, i.e. those included in the narrow aggregate M1, have continued to rise at a rapid pace recently.
The growth of loans to the private sector appears to be stabilising at levels above 5%. While the decline in loan growth which has occurred over the past 18 months is significant, the current rate of growth is not low by historical standards. This indicates that bank financing conditions are overall favourable. The assessment of monetary developments remains complex at this stage.