In July 2014The monetary base The monetary base includes money in circulation (outside banking system), banking reserves (banks' reserves in MDL on correspondent accounts maintained at the National Bank of Moldova and cash in banks), deposits at sight of other organizations with the National Bank of Moldova, “overnight” deposits of banks and required reserves in foreign currency. was MDL 27037.5 million, increasing by MDL 941.9 million (3.6 percent) compared to June 2014. The increase of the monetary base was determined by the increase in the net domestic assets by MDL 1739.4 million (27.8 percent). At the same time, net foreign assets decreased by MDL 797.6 million (2.5 percent). Money supply M2Money supply M2 includes monetary aggregate (M0), deposits in MDL of residents and money market instruments. was MDL 45364.3 million, increasing during the reporting period by MDL 296.8 million, or by 0.7 percent as compared to June 2014. At the same time, money supply M3Money supply M3 includes money supply M2 and deposits in foreign currency of residents expressed in MDL. increased by MDL 351.2 million (0.5 percent) in July 2014. The analysis of the passive components of money supply (M3) denotes the fact that this increase was driven by the increase in the monetary aggregate balance, Money in circulation M0Money in circulation M0 represents cash in circulation put by the National Bank of Moldova, except for cash in banks and NBM vault. - by MDL 526.7 million, while the total deposits balance decreased by MDL 179.6 million in July 201(Table no.1).

The main factors leading to the increase in the balance of monetary aggregate (M0) during the analyzed period were the net purchases of foreign currency by individuals, the cash releases from the deposits accounts of individuals through banks and for the procurement of the agricultural products, which accounted for MDL 171.3 million, MDL 92.3 million and MDL 110.9 million, respectively.

Table no.1. Passive components of money supply

The balance of deposits in national currency was MDL 27218.9 million, decreasing by MDL 234.0 million, which share equaled to 58.3 percent of total balance of deposits and the balance of deposits in foreign currency (recalculated in MDL) increased by MDL 54.4 million up to the level of MDL 19442.0 million (with a share of 41.7 percent) (Table no.2).

Table no.2. Deposits structureDeposits structure is classified by institutional sectors, according to the Instruction on filling out by the licensed banks of the Report on monetary statistics (Official Monitor of the Republic of Moldova no.206-215 of December 2, 2011).

The increase of money supply M3 in the reporting period was determined by the increase in net domestic assets of the banking system by MDL 874.8 million (2.9 percent). At the same time, net foreign assets decreased by MDL 523.7 million (1.5 percent). Domestic credit of the banking system increased by MDL 606.1 million, up to the level of MDL 47073.0 million, due to the increase in the balance of credits granted to economy and the balance of net credits granted to the Government by MDL 535.8 million and MDL 70.3 million, respectively.

The balance of credits in economyAccording to the IMF methodology, the interbank credits and the credits granted to the Government are excluded from the total credits in the economy (including the interest calculated for credits and for credits of banks - in liquidation process).  increased by 1.2 percent in July 2014 at the expense of the increase of credits granted to the economy in national currency by MDL 448.3 million (1.6 percent), and those granted in foreign currency (expressed in MDL) by MDL 87.5 million (0.5 percent) (Table no.3).

Table no.3. Structure of credits granted to economy

Positive evolution of the balance of credits granted to economy in national currency was determined by the increase in the balance of credits granted to the non-financial companies sector, which majority ownership is private, by MDL 257.1 million (1.3 percent), balance of credits granted to other resident sectors (including individuals) by MDL 194.4 million (2.8 percent) and the balance of credits granted to non-banking financial sector by MDL 12.1 million (2.3 percent). At the same time, the balance of credits granted to the non-financial companies sector, which majority ownership is public, decreased by MDL 15.4 million (2.1 percent).

At the same time, the increase in the balance of credits granted to economy in foreign currency (expressed in MDL) was influenced by the increase in the balance of credits granted to the non-financial companies sector, which majority ownership is private, by MDL 177.6 million (1.1 percent), while the balance of credits grated to non-financial companies sector, which majority ownership is public, the balance of credits granted to non-banking financial sector and the balance of credits granted to other resident sectors (including individuals) decreased by MDL 35.2 million (4.4 percent), by MDL 40.2 million (4.8 percent) and by MDL 14.7 million (5.3 percent).