M3 trend to be volatile and divergent, say analysts

M3 basically refers to an economy’s broadest measure of money supply.

PETALING JAYA: Volatile and even divergent trends in local money supply, deposit and credit growth are expected in the coming quarters as policies and the Covid-19 pandemic continue to play out.

Maybank Investment Bank Research said in a note to clients that looking ahead, money supply, deposits and credit growth will be affected firstly, by another round of statutory reserve requirement (SRR) cut by Bank Negara to 2% which was effective March 20 and which released RM30bil in liquidity.