Banca Naţională a României

At end-February, broad money (M2) amounted to lei 131,620 billion, increasing by 1.7 percent in nominal terms but falling by 0.5 percent in real terms compared with the previous month (since the 2.2 percent inflation rate outpaced the growth rate of M2). Solely net domestic assets were accountable for the nominal rise in broad money.

Net foreign assets dropped by 4.3 percent to lei 39,944 billion, due to the 7.5 percent decline in the lei equivalent of foreign assets following the foreign debt service payments. Net domestic assets went up 4.5 percent to lei 91,676 billion, against the background of a 1.4 percent rise in domestic credit to lei 103,514 billion.

The 3.2 percent rise in credit to non-government, which amounted to lei 61,804 billion, was due to the growth of both credit in foreign currency and credit in lei by 4.1 percent and 2.2 percent respectively. Credit to government, net declined by 1.2 percent to lei 41,709 billion as a result of the redemption by the Ministry of Finance of the first half-yearly tranche of government securities, amounting to lei 1,465 billion, issued for the restructuring of Bancorex. This development was partly offset by the lei 571 billion increase in the general account of Treasury with the National Bank and by the issue of new government securities on the domestic market.

Developments of broad money components were typical of this time of the year. M1 rose by 2.7 percent to lei 25,471 billion, following the seasonally-induced increase in currency in circulation, up 2.8 percent to lei 16,151 billion. Quasi-money grew by 1.4 percent to lei 106,149 billion owing to the 1.4 percent drop in the residents' forex deposits (down to lei 49,093 billion) and to the 2.9 percent rise in household savings (that totalled lei 41,922 billion). Household forex deposits expressed in lei posted a 2.1 percent decline, caused by the higher returns on and low risk attached to forex-denominated government securities for non-bank customers.