Eurozone money supply growth slows in June: ECB

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Growth of the eurozone's money supply eased markedly in June, the European Central Bank said on Wednesday as its M3 indicator rose by 2.1 percent following a gain of 2.5 percent in May.

The ECB had initially estimated the increase in May at 2.4 percent, and analysts polled by Dow Jones Newswires had pencilled in a rise of 2.3 percent in June.

The ECB regards the M3 figure as a key guide to pressures likely to affect inflation in the medium term and bases its interest rate levels in part on the current trend.

The central bank seeks to keep eurozone inflation below but close to 2.0 percent, whereas it stood at 2.7 percent in June.

Meanwhile, the rate of growth in eurozone bank loans to the private sector also declined in June, the ECB said.

Lending increased by 2.5 percent in June compared with the same month last year, but that was a decline from the 2.7 percent level registered in May.

The central bank raised its benchmark interest rate to 1.50 percent last month to contain dogged inflation, but is now expected to keep the rate stable for the next few months, at least, owing to a slowdown of the eurozone economy.

© 2011 AFP

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