There was an increase in 29 per cent in overnight deposits in 2014, which reached €8.4 billion, following an increase the previous year of 13.7 per cent.
The increase was spread almost equally between households and non-financial corporations, according to the Central Bank of Malta.
“This strong preference for liquid assets may reflect several factors, in particular the fact that interest rates with a fixed term to maturity declined, thus reducing the opportunity cost of investing in overnight deposits.
“However, the increase in overnight balances may have also reflected higher uncertainty abroad and a lack of attractive investment opportunities,” the CBM said in its annual report.
Residents’ deposits with monetary financial institutions grew by 14.6 per cent last year. Time deposits contracted, with those with a maturity of up to two years falling by two per cent and those with a maturity of over two years declining by three per cent.
At the end of the year, overnight deposits represented over 60 per cent of all total resident deposits.
The interest rates on these deposits declined from 1.41 per cent to 1.03 per cent in 2014.