In January 2018, 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. increased by MDL 1,105.8 million (3.0 percent) compared to the previous month, and amounted to MDL 38,102.7 million. The increase of the monetary base was determined by the growth of its counterparts: net foreign assets which increased by MDL 682.3 million (1.6 percent) and net domestic assets which increased by MDL 423.5 million (8.2 percent).

Money supply M2 Money supply M2 includes money in circulation (M0), deposits of residents in MDL and money market instruments.decreased MDL 170.2 million, or by 0.3 percent compared to December 2017, and recorded MDL 52,819.1 million, having increased by 14.1 percent compared to the same period of the previous year.

Money supply M3 Money supply M3 includes money supply M2 and deposits of residents in foreign currency expressed in MDL.increased by MDL 123.2 million (by 0.2 percent), recording values 9.2 percent higher than in January 2017.

The analysis of the Money supply components (M3) shows that its increase over January 2018 was driven by the increase in the total deposit balance, by MDL 764.6 million, whereas the monetary aggregate money in circulation (M0)Money in circulation M0 represent circulating cash issued by the National Bank of Moldova, except for cash in banks and NBM vault. decreased by MDL 641.4 million (Chart 1).

It should be mentioned that Money in circulation (M0) and Money supply (M1)Money supply M1 includes money in circulation and residents' domestic currency sight deposits. have increased as compared to January 2017 by 11.5 and 27.2 percent, respectively.

The domestic currency deposit balance has increased by MDL 471.2 million, having amounted to MDL 34,408.0 million, accounting for a share of 58.6 percent of total deposit balance, whereas the foreign currency deposit balance (recalculated in MDL) increased by MDL 293.4 million, to MDL 24,360.0 million, accounting for a share of 41.4 percent (Chart 2).

From the perspective of its counterparts, the growth of Money supply M3 over the reporting period was determined by the increase in net foreign assetsIs calculated by subtracting foreign liabilities from foreign assets.
Foreign assets include: deposits placed in non-residents insittutions; loans to non-residents; debt securities held (issued by non-residents); non-resident; shares and other equity held by residents, monetary gold.
Foreign liabilities include the resources attracted from non-residents: deposits, debt securities, credits and IMF loans, liabilities for distributed SDRs and other liabilities of the banking system, by MDL 460.5 million (0.7 percent), and the decrease in net domestic assetsis calculated by subtracting domestic liabilities from domestic assets.
Domestic assets include: resident loans; debt securities held (issued by residents); shares and other equity investments held by residents.
Domestic liabilities (excluding components of money supply M3) include the resources attracted from residents: deposits, debt securities with over 2 years’ maturity issued on domestic market; capital and reserves., which declined by MDL 337.3 million (3.7 percent).

In January 2018, the balance of claims on the economy According to the IMF methodology, non-resident loans, interbank loans and loans extended to the Government of the Republic of Moldova are excluded from the total claims on the economy, (including the interest calculated for credits and for credits of banks - in liquidation process). decreased by MDL 400.8 million (1.1 percent) as a result of the decrease in domestic currency claims on economy, by MDL 1,152.2 million (5.3 percent) whereas the foreign exchange claims on economy (recalculated in MDL) have increased by MDL 751.4 million (4.6 percent) (Chart 3) .

It should be mentioned that foreign exchange claims on economy, expressed in USD, have increased over the reference period by USD 66.9 million.

The evolution of the balance of domestic currency claims on economy was determined by the decrease in balance of claims on such sectors as: non-financial companies which majority ownership is public, non-financial companies which majority ownership is private and other resident sectors (including individuals) by MDL 35.6 million (4.1 percent), 1,045.0 million (8.9 percent), and 75.7 million (0.9 percent), respectively. At the same time, the balance of claims on the non-banking financial sector has increased by MDL 4.1 million (0.6 percent).  

The increase of balance of foreign exchange claims on the economy (expressed in MDL) was determined by the increase in balance of claims on non-financial commercial companies which majority ownership is private, claims on non-banking financial sector and on other resident sectors (including individuals) by MDL 636.8 million (4.3 percent), MDL 26.6 million (3.4 percent) and MDL 111.7 million (33.1 percent), respectively. At the same time, the balance of claims on non-financial companies which majority ownership is public has decreased by MDL 23.7 million (4.8 percent).

The evolution of the components of the claims on the economy was conditioned by the methodological changes made in January 2018 in the method of determining of the loans extended / received in Moldovan lei, the balances of which, according to the loan underwriting agreement, change in line with the evolution of the Moldovan leu exchange rate against the foreign currency to which it is linkedAccording to the Guidelines on Preparing Monetary Statistic Reports by licensed banks, amended and completed under the Decision no. 341 of December 21, 2017 of the NBM Executive Board, in force since January 2018, the loans extended / received in Moldovan lei, the balances of which, under the loan underwriting agreement, change in line with the evolution of the Moldovan lei exchange rate against the foreign currency to which it is linked, shall be reflected as foreign currency loans.
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* change recorded against the values of the same period of the previous year

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