Money supply down in November with policy change By

© Reuters. – Broad money supply M3 grew 39.4% year-on-year in November 2020, after growing 45.8% year-on-year in October 2020, and grew 45.8% year-on-year in October. The annual growth rate of M1, the narrowest currency definition, was 93.8% in the previous month, but fell to 82.8% in November. M1 had risen to 93.8% in October.

With the CBRT’s tight monetary policy in November and the increase in interest rates, the money supply decreased in November.

The annual growth rate of loans granted by the monetary sector for households was 46.6% in October 2020 and 44.2% in November 2020. Loans to non-financial institutions increased by 44.1% in October 2020 compared to the previous year, and increased by 41.4% in November 2020 compared to the previous year.

When the contribution of broad money supply components to the annual growth in money supply is analyzed; it was observed that time deposits were the main contributor to the money supply, followed by demand deposits.

The increase in time deposits with 24% was effective in the annual growth of 39.4% observed in the wide money supply M3 in November 2020, followed by demand deposits with 12.1%, and the contribution of other items remained limited.

Reflection of M3 growth on provision items; 41% from the private sector, 8.8% from the general government, 1.1% from non-bank financial institutions and 0.8% from net foreign assets. On the other hand, other items (net) decreased by 12.3%.

* In the money supply, which is the amount of money in circulation in the market, M1 is the inclusion of demand deposits in cash banks in the market. M2, on the other hand, is the inclusion of time deposits in cash in the market and demand deposits in banks. M3 is the largest money supply and is obtained by adding funds from repo, money market funds and issued securities with a maturity of up to 2 years to M2.

Author: Deniz Engin

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