Banca Naţională a României

At end-June, broad money (M2) amounted to lei 148,510 billion, up 3.8 percent month on month in nominal terms or 1.0 percent in real terms. Only the rise in net foreign assets was accountable for the broad money growth.

Net foreign assets rose by 16.2 percent to lei 58,460 billion via the 25.0 percent rise in the foreign exchange component due to the release of the second tranche of the agreement with the IMF and of the drawings related to the IBRD and European Union loans. Net domestic assets decreased by 2.9 percent to lei 90,050 billion mainly as a result of a 2.6 percent fall in domestic credit to lei 107,529 billion.

The 0.8 percent rise in non-government credit, which reached lei 67,206 billion, was attributed to the 1.7 percent growth of credit in foreign exchange (owing to the depreciation of the domestic currency), the credit in lei decreasing 0.6 percent. Credit to government, net crept down by 7.8 percent (to lei 40,323 billion) due to the increase by the tantamount of lei 5,120 billion in the Finance Ministry foreign currency account balance with the National Bank following the inflows under the IBRD and European Union loans.

M1 increased by 5.3 percent to lei 32.269 billion, both its components being accountable for this development. Currency in circulation rose by 6.3 percent to lei 21,461 billion. The factors behind this evolution were the following: the holiday entitlement paid to the teachers, the payments performed by CEC in favour of Credit Bank depositors, and the enforcement of pension re-correlation measures. Demand deposits increased by 3.3 percent to lei 10,808 billion. Quasi-money went up by 3.4 percent to lei 116,241 billion. Household savings grew by 1.5 percent to lei 43,253 billion, since Treasury certificates issued by the Ministry of Finance continued to provide yields higher than interest rates on bank deposits. The amount of lei-denominated Treasury certificates outstanding with individuals expanded by 7.2 percent, reaching lei 6,576 billion, while the weight of household savings in broad money decreased from 29.8 percent to 29.1 percent. Time deposits in lei outstanding with economic agents rose by 3.6 percent to lei 15,318 billion. Residents’ forex deposits, expressed in lei, moved 4.8 percent higher to lei 57,670 billion due mainly to the leu depreciation.