Information on methodological changes in the monetary statistics, the statistics of the other financial corporations and the interest rates statistics

Transcription

1 NATIONAL BANK OF THE REPUBLIC OF MACEDONIA Information on methodological changes in the monetary statistics, the statistics of the other financial corporations and the interest rates statistics July 2018

2 1. Introduction During the past period, the Statistics Department has been committed on the attainment of the strategic goal for providing quality and consistent statistical data, fully harmonized with the international and European statistical standards. In this regard, one of the activities that are carried out on a regular basis is continuous improvement of the methodological bases of statistical research within the competence of the National Bank. The need for changing methodological bases for preparation of monetary data, more specifically, resulted from: - the newly published Monetary and Financial Statistics Manual and Compilation Guide of the International Monetary Fund - IMF, from 2016; and - The conducted Technical Mission of the IMF in the National Bank, the Statistics Department, in 2015, in the area of monetary and financial statistics. During 2016, the International Monetary Fund (IMF) introduced innovations that are included in the new Monetary and Financial Statistics Manual. This new publication combines and updates concepts, definitions and recommendations, and it brings together the Monetary and Financial Statistics Manual (MFSM, IMF, 2000) and the Compilation Guide - MFS Guide, IMF, 2008), encompassing the extensive methodological and practical aspects of the compilation process of the monetary and financial statistics. The new Compilation Guide provides a broad framework for collecting and presenting these statistics and includes specific information and recommendations for the classification, sectorization, valuation and recording of various categories of financial assets and liabilities in individual economy. The concepts, accounting principles, and other methodological recommendations of this new Compilation Guide are in line with those of: - the System of National Accounts SNA 2008, - the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6), - the Government Finance Statistics Manual 2014 (GFSM 2014) and - the Publication by the United Nations and the European Central Bank of the Handbook on Financial Production, Flows and Stocks in the System of National Accounts). The MFS Manual and Compilation Guide promotes the harmonization of concepts between different macroeconomic databases and interconnected international comparability of data. Given that the main source of monetary statistics data is the financial corporations accounting record, the new MFS Manual and Compilation Guide explains the connections between monetary and financial statistics and internationally accepted accounting standards, in particular the International Financial Reporting Standards (IFRSs). Also, some of the changes in the methodology for compiling the monetary statistics reports resulted from the implementation of the recommendations of the Technical Mission of the IMF from 2015 and most of them are based on the the Manual and Compilation Guide. However, the methodological changes depend on the type of recommendations and are basically related to the change in the manner of recording certain categories (gross or net basis), changes in the classification of financial instruments, new definitions for certain indicators, etc. The changes in the monetary statistics imposed a need for appropriate adjustments in the interest rates statistics and the statistics of other financial corporations (OFCs). In order to ensure consistency of data, the changes in the methodological bases were carried out simultaneously with all three statistics, while the new time series of data were prepared according to the length of the available time series in certain statistics and the available data. 2

3 2. Important methodological changes 2.1. Changes in classification of financial instruments; a. Reclassification of financial instruments in denars indexed in foreign currency, from financial instruments in national currency into financial instruments in foreign currency. Methodology currently in use: In both, the Monetary and Financial Statistics Manual and the Manual for the Preparation of Monetary and Financial Statistics", the settlement currency of the instrument is a key factor for the division of the financial assets / liabilities by currency (in national or foreign currency). Therefore, the financial instruments in national currency with FX clause were presented as instruments in national currency. New methodological recommendation: The sixth edition of the Balance of Payments and International Investment Position Manual recommends that financial instruments in national currency indexed in foreign currency to be displayed together with financial instruments in foreign currency. This approach is accepted and applied in the new MFS Manual and Compilation Guide. As a result, the IMF Technical Mission recommends reclassification of financial instruments in denars with currency clause from financial instruments in denars into financial instruments in foreign currency. To implement this recommendation, changes were made to the monetary statistics data, as well as appropriate adjustments of the data in the OFC statistics and the interest rate statistics. b. Provisions for losses for the financial assets are reclassified from the category shares and other equity - general and special reserves in the category other accounts payable - provisions for losses. Methodology currently in use: The general rule in the monetary statistics is to present the financial instruments on a gross basis, without calculated provisions for losses on assets. In addition, changes in the value of financial assets that are imposed exclusively for meeting regulatory, supervisory or accounting requirements are not recorded within the financial asset itself. According to the previous presentation of monetary data, the - provisions for losses on assets were included in the category "shares and other equity - general and special reserves" that met only the requirements of the 2008 SNA 2008 financial statistics framework, but differs from the new monetary statistics recommendations. New methodological recommendation: In the monetary statistics in accordance with the new MFC Manual and Compilation Guide, the provisions for losses on assets, which represent internal calculations of the data reporting entities, are treated as liabilities that are presented within the category "other accounts payable - other - provisions for losses". In order to implement this recommendation, an adequate reclassification of the amounts of provisions for losses on assets in the specified category has been made. In the new data set, this recommendation reflects the data from the monetary statistics and the OFC statistics. By applying this approach, the methodological definitions of ODI capital accounts in the monetary and supervisory statistics are approximated. 3

4 2.2. Change in broad money and its components (monetary aggregates) Methodology currently in use: According to IMF methodological recommendations in the balance sheets of the central bank and ODC, the division of the financial instruments on the liabilities side is based on their inclusion in monetary aggregates ("included in" or "excluded from" monetary aggregates), and in accordance with the national definition of broad money. According to the current methodology, the monetary aggregate M4, as a national definition of broad money is the basis for dividing the financial instruments into the categories included in or excluded from the broad money, on the liabilities side in the Balance Sheet of the NBRM and the Balance Sheet of other depository corporations (ODC) ". The monetary aggregates that the NBRM have been calculating so far have the following scope: M1 covers the currency in circulation and demand deposits. At the same time, demand deposits refers to current accounts with banks and savings houses and current accounts of other financial corporations with the NBRM. Currency in circulation represents the difference between the total amount of banknotes and coins and the amount of cash in the banks vault, in the NBRM vault and in the dispersed vaults. M2 (liquid assets) includes the monetary aggregate M1 and short-term deposits. The short-term deposits are defined as deposits that include: sight deposits, overnight deposits, term deposits with maturity to one year (in denars and in foreign currency). М4 (total deposit potential of the monetary system) includes the monetary aggregate M2 and the long-term deposits i.e. deposits with maturity over one year, in denars and in foreign currency. Monetary aggregates include deposits of the following sectors: other financial corporations, local government, nonfinancial corporations (public and other), households (individuals and self-employed individuals) and nonprofit institutions serving to households. New methodological recommendation: Although the new MFC Manual and Compilation Guide does not provide precise recommendations for a national definition of broad money, it also refers to the basic criteria that should be taken into account when formulating the standard (internationally comparable) definition of broad money, such as: (a) The financial instruments should be sufficiently liquid. Key criterion for determining the level of liquidity of financial instruments is their maturity. The original maturity from one year to two year is acceptable as an upper maturity limit: (b) The liabilities based on financial instruments should be towards the money holding sectors. Money holders sectors are all resident sectors, with the exception of the state sector and depository institutions, that is: Other financial corporations; Local Government; Non-financial corporations: Other resident sectors (households and non-profit institutions serving households). The new methodological recommendation implies revising the national definition of broad money and introducing a new monetary aggregate M3, defined as a monetary aggregate M2 plus deposits with a maturity of one to two years, thus aligning with the definition of the broad money in the euro area. Consequently, the monetary aggregate M4 is defined as the monetary aggregate M3 plus long-term deposits with maturity over two years. 4

5 The NBRM will continue to calculate and publish monetary aggregate M4 for analytical purposes, but the monetary aggregate M3 will be used as a new standard definition of broad money. This recommendation reflects in the monetary statistics in the new set of data Other methodological changes in the data Changes in the manner of presenting certain transactions with the IMF in the monetary statistics a. Net disclosure of the NBRM claims / liabilities based on contingent activities on behalf and for the account of the state, for the credit arrangements with the IMF Methodology currently in use: The Precautionary Credit Line (PCL) concluded between the Government of the Republic of Macedonia and the IMF, is shown in the monetary statistics on the assets and liabilities side in the category "other accounts receivable - settlement accounts" (claims from the central government in the name of and for the account of the IMF / central government liabilities related to loan repayment - PCL). The inclusion of these two settlement accounts on gross basis in the NBRM Balance Sheet was in accordance with the accounting record system of the NBRM, in order to clarify that the Ministry of Finance of the Republic of Macedonia is responsible for the PCL repayment, and the NBRM acts only as intermediary which performs the duties on behalf and for the account of the Ministry. Moreover, the inclusion of the NBRM contingent activities in its balance sheet (for the PCL arrangement) did not affect the data consistency, from the aspect of data alignment in the monetary statistics with the balance of payments and government statistics (where these liabilities are presented as government sector liabilities to abroad), but nevertheless led to overestimation of total assets / liabilities and NBRM claims / liabilities towards certain sectors. New methodological recommendation: The new MFC Manual and Compilation Guide recommends institutional approach rather than a functional approach in the coverage of the monetary statistics accounts, which means that only those accounts that are related to transactions / positions on behalf of and for the NBRM account should be shown in monetary data. Accordingly, for the monetary statistics needs, the accounts for contingent activities of the PCL arrangement should not be included in the Balance Sheet of the NBRM. In order to implement this recommendation, the accounts for the NBRM claims / liabilities based on contingent activities on behalf of and for the account of the state are presented on a net basis. In the new set of data, this recommendation reflects on the monetary statistics (NBRM Balance Sheet), whereby differences in data exist only for the duration of the PCL arrangement, i.e. from March 2011 to January b. Gross presentation of the transactions for the enumeration quota of the Republic of Macedonia with the IMF Methodology currently in use In the monetary statistics, in the NBRM Balance Sheet, the transactions related to the "Registered quota with the IMF" are shown net on the liabilities side in the following way: the IMF claim for the denar component of the registered quota is presented with a negative sign in the category "other accounts payable, other liabilities of the residents, in foreign currency", while the liabilities to the IMF for the issued bill of exchange as well as the transactions in the IMF accounts 1 and 2 are shown with a positive sign in the category "transferable deposits of non-residents in national currency, IMF accounts 1 and securities and IMF accounts 2". 5

6 New methodological recommendation: The new MFC Manual and Compilation Guide recommends applying gross principle of recording IMF transactions in the central bank s Balance Sheet, when the central bank is a depository and fiscal agent of the country's financial relations with the IMF and is an institution responsible for IMF transactions. To implement this recommendation, in the NBRM Balance Sheet, transactions related to the "Registered Quota with the IMF" will be presented using the gross principle, as follows: on the assets side in the category "other accounts receivable, other non-residents receivables, IMF quota, in foreign currency", the requirements of the IMF for the registered quota will be displayed, and on the liabilities side within the "transferable deposits of non-residents in denars, IMF accounts 1 and securities and IMF accounts 2 "will display the liabilities after the issued bill of exchange. In the new data set, this recommendation reflects on the monetary statistics (NBRM Balance Sheet) Additional revisions on time series Within the monetary statistics, additional time series revisions have been made in order to improve the statistical coverage of the data. Audits are generally aimed at improving the sectoral distribution of data and improving the coverage of financial instruments (in terms of currency distribution, maturity structure and valuation, i.e. calculated interest and doubtful and contested claims). 3. Data publication plan according to new methodology The new data sets will be published on the NBRM website in July and August 2018, in accordance with the Advance Release Calendar. We note that differences in the length of published time series in individual statistics are conditioned by the available time series in individual statistics and the available data sources. More specifically, the time of publication and the length of time series, according to certain types of statistics are as follows: - The data on the monetary statistics will be published on July 20, 2018, together with the publication of data for June 2018, when revised series of data for the period from January 2009 to May 2018 will be published, as well; - The data from the interest rate statistics will be published on July 31, 2018 with data for June 2018, when a revised time series will be published for the period from January 2015 to May At the same time, a revised time series of data on the total interest rates and the interest rates for the newly agreed activities will be published for the period from 2005 onwards; - The data from the OFI statistics will be published on 31 August 2018 with data for the second quarter of 2018 together with the revision of the data for the first quarter of Given that there is no possibility to revise the time series of data backwards, they will remain unchanged, which means that, due to methodological changes, we will have an interruption in the time series of data. This interruption in the series will be marked accordingly with the footnote. - The -survey of financial corporations (quarterly data on assets and liabilities of financial corporations) will be published on 31 August 2018 with data for the second quarter of 2018, when the time series for 6

7 depository institutions is published as of the first quarter of Since the time series of the data for other financial corporations will not be revised, this data series will have a series interruption, which will be marked accordingly with the footnote. For proper communication with data users, updated methodological explanations will be published on the NBRM website. 7