Jun. 26, 2012 (China Knowledge) - Taiwan's central bank has announced that its broad money supply, M2, grew 4.4% YoY in May this year.

The growth rate was lower than the 4.72% rise recorded in April 2012, according to the central bank's statement.

Taiwan's M1B, a measure of money in circulation, increased 3.24% last month, lower than the 3.77% growth in April 2012.

The loans and investments of major financial institutions, including the postal savings institutions, had grown 5.23% YoY at the end of May 2012, lower than the 5.53% growth as of Apr. 30, 2012.

M2 is closely linked with prices and long-term economic activity and is used by the central bank to implement its monetary policy.

Official statistics showed that the island's consumer price index (CPI) increased 1.74% YoY in May, the highest level since February this year, and its wholesale price index (WPI) fell 0.64% last month, reflecting a decline for the third consecutive month.