At end-August, broad money (M2) amounted to lei 158,135 billion, up 3.4 percent month on month in nominal terms and 1.6 percent in real terms. The rise in net foreign assets was mainly accountable for the broad money growth.
Net foreign assets rose by 4.7 percent to lei 69,036 billion due to the 6.4 percent gain in the foreign exchange component. Net domestic assets increased by 2.4 percent to lei 89,099 billion given that domestic credit inched up by 0.6 percent to lei 109,037 billion and other net assets recorded a negative balance lower by lei 1,528 billion.
The 3.5 percent rise in non-government credit, which reached lei 69,908 billion, was attributed to the growth of both the credit in foreign exchange, by 4.8 percent (solely as a result of the national currency depreciation) and the credit in lei, by 1.5 percent. Credit to government, net, fell by 4.3 percent to lei 39,129 billion following the use of resources from the foreign-exchange account of the Finance Ministry opened with the National Bank of Romania as well as the redemption of government securities denominated in lei.
M1 increased by 1.1 percent to lei 34.150 billion, against the background of divergent developments in its components. Currency in circulation declined by 2.3 percent to lei 21,363 billion, whereas demand deposits increased by 7.4 percent to lei 12,787 billion. Quasi-money grew by 4.1 percent to lei 123,985 billion. Household savings edged down by 1.2 percent to lei 43,090 billion, since both forex deposits and Treasury certificates (in lei and foreign exchange) issued by the Ministry of Finance provided yields higher than interest rates on deposits in lei. Under the circumstances, household forex deposits, expressed in US dollars, went up by 2.4 percent and the volume of foreign-exchange Treasury certificates outstanding with individuals jumped by 18.1 percent (to the equivalent of USD 90.7 million). The amount of lei Treasury certificates outstanding with individuals expanded by 5.9 percent, reaching lei 7,250 billion, while the share of household savings in broad money decreased from 28.5 percent to 27.2 percent. Time and restricted deposits in lei of economic agents rose by 5.8 percent to lei 16,110 billion. Residents' forex deposits, denominated in lei, moved 7.5 percent higher to lei 64,785 billion owing both to the leu depreciation against the US dollar (by 4.9 percent) and the rise in deposits denominated in foreign currency (by 2.5 percent).