At end-October, broad money (M2) amounted to lei 164,063 billion, up 0.5 percent month on month in nominal terms, but down 2.2 percent in real terms. The rise in broad money resulted from opposite developments in its components.
Net foreign assets increased by 6.8 percent to lei 83,533 billion due to the 8.8 percent gain in the 'Foreign Exchange' component and the 0.2 percent rise in the 'Gold' component. Net domestic assets contracted by 5.3 percent to lei 80,530 billion given that domestic credit fell by 2.9 percent to lei 106,674 billion and other net assets recorded a negative balance higher by lei 1,325 billion.
The 1.5 percent rise in non-government credit, which reached lei 74,275 billion, was attributed to the 3.9 percent growth of the credit in lei and the 2.8 percent reduction in credit in foreign exchange (the foreign exchange component, expressed in lei, remained virtually unchanged). Credit to government, net, fell by 11.8 percent to lei 32,398 billion mainly following the redemption of maturing government securities.
M1 inched down by 0.1 percent to lei 35.643 billion, as a result of the 1.1 percent decline in currency in circulation to lei 22,509 billion, and of the 1.6 percent increase in demand deposits to lei 13,134 billion. The diminution in currency in circulation stemmed mainly from the acquisitions of government securities in lei made by the non-bank sector, which held such securities worth lei 13,903 billion at end-October (up by 12.5 percent over end-September). At end-October, government securities in foreign exchange held by the non-bank sector were worth the equivalent of USD 146 million (down by 2.9 percent month-on-month).
Quasi-money edged 0.7 percent higher to lei 128,421 billion. Household savings moved down by 2.9 percent to lei 41,095 billion (their share in broad money sliding from 25.9 percent to 25 percent), as households maintained their preference for forex deposits and Treasury certificates issued by the Ministry of Finance. Under the circumstances, household forex deposits, expressed in US dollars, went up by 4.2 percent, while the volume of foreign-exchange Treasury certificates outstanding with individuals rose by 3.5 percent (to the equivalent of USD 117.1 million) and the lei-denominated Treasury certificates outstanding with individuals expanded by 4.3 percent, reaching lei 7,722 billion. Time and restricted deposits in lei of economic agents shrank by 5.5 percent to lei 16,095 billion. Residents' forex deposits, expressed in lei, moved 4.4 percent higher to lei 71,231 billion owing both to the leu depreciation against the US dollar (by 2.8 percent) and the rise in deposits denominated in foreign currency (by 1.6 percent).