20.08.2012.

Money supply level stable in July

The changes in monetary indicators were small in July, reflecting the moderate drop in household deposits and rise in cash currency characteristic of the summer season. As a result of the impact from the lower base, the deposits annual change indicator returned to positive for the first time since last autumn.

Primarily as a result of the drop in housing loans the overall loan balance in July dropped by 15.1 mil. lats while loans granted to non-financial enterprises rose slightly. Lending in lats continued to grow. The rate of annual change in loans, with indicators from banks that have lost their licences this year, remained negative (-5.6%).

Money indicator M3, which characterizes the amount of cash and non-cash currency in the economy, grew 0.7% in July, with domestic overnight deposits increasing by 1.7%, as well as one credit institution emitting debt securities with an up to 2 years maturity. Time deposits and deposits redeemable at notice dropped moderately. That indicates that the issue of risks for further economic growth is still topical.

Taking into account the fluctuating and hardly positive impact of the outside environment as well as the problems affecting some Latvian credit institutions over the past year, the stability of money supply as well as the situation in the lending market in Latvia deserves a positive evaluation. There is neither a pronounced drop in deposits (on the contrary: an annual rise in domestic deposits has been observed, moreover, excluding the indicators of banks that have lost their licences, it already exceeds 10%), nor deterioration in lending indicators. This situation reflects the overall growth of the Latvian economy, however, taking into account the slowing of growth rate and high outside risks, there is no reason to expect either a substantial growth in deposits or a substantial increase in lending activity.

APA: Purviņš, V. (2020, 30. nov.). Money supply level stable in July. Taken from https://www.macroeconomics.lv/node/2197
MLA: Purviņš, Vilnis. "Money supply level stable in July" www.macroeconomics.lv. Tīmeklis. 30.11.2020. <https://www.macroeconomics.lv/node/2197>.

Similar articles

Or log in with a social profile account:

Restricted HTML

Image CAPTCHA
Up