Reserve money drops to 2%, broad money bumps to 6% in December 2022

Photo: Avas Online

The reserve money (M0) growth decelerated to 2% and the annual broad money (M2) growth rose to 6% at the end of December 2022.

According to Maldives Monetary Authority (MMA), reserve money growth decelerated during the last month of 2022 after registering a growth of 4% at the end of November 2022. On the other hand, broad money increased by one percent after registering a growth of 5% in November.

The annual growth in broad money was primarily driven due to an increment in quasi-money. Moreover, this was mainly reflecting a substantial growth in transferable deposits denominated in foreign currency, which followed an increment in time deposits denominated in both local and foreign currency.

Additionally, savings deposits denominated in local currency observed a growth, followed by a marginal growth in savings deposits denominated in foreign currency. Narrow money remained broadly unchanged during the review month.

The annual broad money growth was driven mainly by the significant rise in net domestic assets. This was largely reflective of the rise in net claims on the central government by the commercial banks and the MMA. The credit to the private sector and public nonfinancial corporations, on the other hand, increased.

Meanwhile, the net foreign assets declined due to the decline in foreign asset accumulation. This was coupled with an increment in foreign liabilities during the period.