Economic Update: Monetary Developments
Thursday 7th of November 2019
October Economic Update - Monetary Developments
Broad money
Broad money had a constant growth rate of 7% since June 2019 to September.
The components of broad money were quasi money (savings and time deposits, securities, etc.), narrow money (demand deposits in MVR) and currency outside depository corporations. The stagnation in broad money was caused by the decline in narrow money growth due to decreases in both transferable deposits and currency outside depository corporations. Meanwhile, quasi money observed significant annual growth and helped to control a further slowdown in the growth of broad money.
Reserve Money
From June-September 2019, growth in reserve money continued its negative trend. When compared with September 2018, there was an annual decline of 4%. This was mainly contributed by the 7% reduction in net foreign assets of MMA as a result of a decrease in foreign currency deposits of commercial banks. However, net domestic assets had a positive reversal and recorded an annual 8% growth in September 2019.
Credit to Private Sector
There was an annual growth of 7% at the end of September 2019. Apart from the commerce sector, credit growth to the private sector increased for all main sectors. This occurred due to the decline in credit lent to restaurants and cafés despite the growth in loans to wholesale and retail activities.
Interest rates
