While a good deal of caution is required when interpreting short-term monetary developments, it should be noted that the 12-month growth rate of M3 has displayed an upward trend during 1999. The high growth of M3 seems to be related to the low level of opportunity costs of holding monetary assets, particularly the most liquid components.
Furthermore, the gradual improvement in the real economic situation may have fostered the expansion of M3. Credit to the private sector also continued to expand at a fast rate in August 1999, namely 10.7%. Since the start of Stage Three credit to the private sector has been expanding at rates of around 10%.