In May 2014 The monetary baseThe 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 25551.3 million, decreasing by MDL 327.5 million (1.3 percent) compared to April 2014. The decrease of the monetary base was determined by the decrease in the net domestic assets by MDL 1053.2 million (19.1 percent). At the same time, net foreign assets increased by MDL 725.7 million (2.3 percent). Money supply M2Money supply M2 includes monetary aggregate (M0), deposits in MDL of residents and money market instruments. was MDL 44776.8 million, increasing during the reporting period by MDL 524.4 million, or by 1.2 percent as compared to April 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 835.5 million (1.3 percent) in May 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 273.6 million, compared to the previous month and the total deposits balance – by MDL 561.9 million (Table no. 1).

Net purchases of foreign currency by individuals, which constituted MDL 261.4 million, were the main factors which led to the increase in the balance of monetary aggregate (M0) during the analyzed period.

Table no.1. Passive components of money supply

The balance of deposits in national currency was MDL 27475.7 million, which share equaled to 59.7 percent of total balance of deposits and the balance of deposits in foreign currency (recalculated in MDL) increased up to the level of MDL 18540.1 million (with a share of 40.3 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 foreign assets of the banking system by MDL 917.0 million (2.8 percent). At the same time, net domestic assets decreased by MDL 81.4 million (0.3 percent). Domestic credit of the banking system increased by MDL 575.8 million, up to the level of MDL 45524.5 million, due to the increase in the balance of credits granted to economy by MDL 669.3 million. At the same time, the balance of net credits granted to the Government decreased by MDL 93.4 million.

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 1.5 percent in May 2014 at the expense of the increase of credits granted to the economy in national currency by MDL 258.2 million (1.0 percent), and those granted in foreign currency (expressed in MDL) by MDL 411.1 million (2.4 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 127.3 million (0.7 percent), balance of credits granted to other resident sectors (including individuals) by MDL 136.3 million and the balance of credits granted to non-banking financial sector by MDL 1.5 million (0.3 percent). At the same time, the balance of credits granted to the non-financial companies sector, which majority ownership is public, decreased by MDL 7.0 million (0.9 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 436.8 million (2.9 percent) and the balance of credits granted to non-banking financial sector by MDL 5.3 million (0.6 percent). The decrease in the balance of credits grated to non-financial companies sector, which majority ownership is public (by MDL 19.4 million or 2.3 percent) and the balance of credits granted to other resident sectors, including individuals (by MDL 11.6 million or 3.8 percent) influenced negatively the balance of credits granted to economy in foreign currency (expressed in MDL).