The assessment of the implications for price stability of monetary developments was less straightforward, particularly in the second half of 2002. The average annual growth rate of the broad monetary aggregate M3 increased to above 7% in 2002, from around 5½% in 2001, considerably exceeding the reference value of 4½%.
This development was in part the result of high volatility in financial markets, and largely reflected investors' preferences for short-term liquid and less risky financial assets. It also reflected the relatively low interest rates in the euro area in 2002.