At end-July, broad money (M2) amounted to lei 152,890 billion, up 2.9 percent month on month in nominal terms, but down 1.4 percent in real terms. The rise in net foreign assets was solely accountable for the broad money growth.
Net foreign assets rose by 12.8 percent to lei 65,915 billion due to the 18.3 percent gain in the foreign exchange component. Net domestic assets declined by 3.4 percent to lei 86,974 billion given that domestic credit inched up by 0.8 percent to lei 108,395 billion and other net assets increased their negative balance by lei 3,942 billion.
The 0.5 percent rise in non-government credit, which reached lei 67,570 billion, was attributed to the 3.9 percent growth of credit in lei, whereas the credit in foreign exchange decreased by 1.7 percent. Credit to government, net, picked up by 1.2 percent (to lei 40,825 billion) as a cumulative result of the decline in the Finance Ministry account balance with the National Bank and the redemption of government securities denominated in lei and foreign currency.
M1 increased by 4.6 percent to lei 33.766 billion, both its components being accountable for this development. Currency in circulation rose by 1.9 percent to lei 21,860 billion, due both to seasonal factors, i.e. payments of holiday emoluments, and to payment of overdue amounts to some public sector employees. Demand deposits increased by 10.2 percent to lei 11,905 billion. Quasi-money grew by 2.5 percent to lei 119,124 billion. Household savings went up merely by 0.9 percent to lei 43,624 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 4.1 percent, reaching lei 6,846 billion, while the weight of household savings in broad money decreased from 29.1 percent to 28.5 percent. Time and restricted deposits in lei inched down by 0.6 percent to lei 15,233 billion. Residents’ forex deposits, expressed in lei, moved 4.5 percent higher to lei 60,267 billion owing both to the leu depreciation against the US dollar (by 2.5 percent) and the rise in deposits denominated in foreign currency (by 2 percent).