The three-month average of the annual growth rates of M3, covering the period from August to October 1999, was unchanged at 6.0%, and thus stood 1½ percentage points above the reference value of 4½%. The growth of the most liquid components of M3 remained very dynamic. In addition, the annual growth rate of credit to the private sector continued to exceed 10%.
As we have noted on previous occasions, these monetary and credit developments are considered to have been driven mainly by the low level of interest rates, as well as by the pick-up in economic activity in the euro area. The initial reaction of euro area financial markets to the Eurosystem’s monetary policy move of last month was favourable.