GERMAN MONEY SUPPLY GROWTH SLOWS IN FEBRUARY

  West Germany's money supply growth
  slowed in February after January's sharp rise but the trend is
  still definitely upward, the Bundesbank said in a statement.
      Growth in the traditionally broad M3 aggregate was only
  moderate in February. While cash in circulation, deposits with
  statutory withdrawal notice and sight deposits grew sharply,
  short-term time deposits fell after expanding unusually
  strongly in January.
      In the six months to February, M3, which excludes holdings
  of German non-banks abroad, grew at a seasonally adjusted
  annual rate of 8.5 pct after 9.8 in the six months to January.
      Compared with February 1986, M3 rose 7-1/2 pct.
      In the six months to February, M2, which excludes time
  deposits with statutory withdrawal notice, rose at a seasonally
  adjusted annual rate of 8.8 pct and M1, which consists of cash
  and sight deposits, rose seven pct.
      International transactions of non-banks again led to a
  significant inflow of funds, the Bundesbank said.
      Net claims of commercial banks and the Bundesbank against
  foreigners, refecting these foreign payments, increased by 9.1
  billion marks in February, little changed from January's rise.
      But in contrast to January, the dampening effect of the
  inflow on domestic credit demand outweighed the expansionary
  effect on money growth, the Bundesbank said.
      Outstanding bank credits to companies and private
  individuals remained virtually unchanged in February.
      A sharp drop in short-term company credits, which reflected
  the foreign funds inflow, was balanced by a moderate rise in
  long-term credits and a sharp rise in credits for securities.
      At the end of February total bank credits to the private
  sector were 4-1/2 pct above the February 1986 level.
      The effect of public authority cash movements on the money
  supply was slightly expansive, the Bundesbank said.
      Although banks acquired large amounts of public authority
  paper, public authorities drew down book credits at commercial
  banks and the Bundesbank.
      Capital formation strengthened in February and slowed money
  supply growth to a larger extent than in January.
      A total of 7.7 billion marks in long-term funds was placed
  with banks after 6.6 billion the previous month.
  

