UAE Monthly Monetary Survey August

Transcription

1 UAE Monthly Monetary Survey August

2 Monetary Developments (*) M increased by %, from AED billion at the end July to AED billion at the end August. This increase was due to a 0.9% increase in Monetary Deposits ( % M ), overshadowing a 0.5% decrease in Currency in Circulation Outside Banks (13 % M ). At the end August, M decreased by %, falling from AED billion at the end July to AED billion. The reduction in M was attributed to a billion reduction, i.e., % decrease in Quasi- Monetary Deposits ( % M ). M also decreased from AED billion at the end July to AED 1 billion at the end August. The reduction in M was primarily brought about by a reduced M, overshadowing the 0.1% rise in Government Deposits ( % M ). In summary; during August M increased by 0.7% whereas, M and M decreased by % and 0. %, respectively. The Money Multiplier The money multiplier indicates by how much the money supply and the underlying components will grow following an increase 1 billion in the Monetary Base, defined as the sum Currency issued (Currency in circulation outside banks and cash at banks), Total Banks' Reserves at the Central Bank and Certificates Deposits held by Banks (see Table ). During the month August, the Monetary Base expanded by %, owing to a combined increase in; Currency Issued ( % the Monetary Base) by % and Banks & OFCs' Excess Reserves (8.7% the Monetary Base) by %, overshadowing the % decrease in Banks Required Reserves (36.4% the Monetary Base) and 1.9% decrease in Certificates Deposits purchased by Banks (31.2% the Monetary Base). From the end July to the end August 2016, the multipliers M and M decreased from 3.71 to 3.65 and from 25 to 4.18, respectively, reflecting that the growth the monetary aggregates was slower than the growth the Monetary Base. The multiplier M remained constant at (*) Monetary aggregates are defined in a footnote to Table 1

3 Table 1. UAE Monthly Monetary Survey (August 2016) (End period, billions ) Dec. March June August Sept. Dec. March June July Aug. In billions Change in August % Change Year on Year Change Money Supply M (*) which: Currency Issued Cash at Banks Currency in Circulation Outside Banks - - Monetary Deposits (**) Money Supply M (*) - - which: Quasi-Monetary Deposits (***) - - Money Supply M (*) - - which: Government Deposits Estimates, subject to revision (*) M = Currency in Circulation Outside Banks (Currency Issued - Cash at banks) + Monetary Deposits M = M + Quasi-Monetary Deposits M = M + Government Deposits (**) Monetary Deposits: all short term deposits on which bank customer can withdraw without prior notice (***) Quasi-Monetary Deposits: Resident Time and Savings Deposits in Dirham + Resident Deposits in Foreign Currencies

4 Table 2. Contribution to Aggregate Money Supply August MoM Year to Date Dec. Dec. Dec. March June July In billions Shares the Aggregates In Billions % Change Contribution to Aggregate Growth* In Billions % Change Money Supply M Money Supply M Money Supply M Currency in Circulation Outside Banks Monetary Deposits Currency in Circulation Outside Banks Monetary Deposits Quasi-Monetary Deposits Currency in Circulation Outside Banks Monetary Deposits Quasi-Monetary Deposits Government Deposits Estimates, subject to revision * Contribution to aggregate growth = Shares the sub-aggregate times percent change in each sub-aggregate, such that contribution sub-aggregates equals percent change in the aggregate

5 Table 3. Money Multiplier in the UAE (End period, billions ) December December December March June July August Change in August 2016 In billions % Change Monetary Base Currency Issued* Banks Required Reserves - - Banks & OFCs' Excess Reserves Certificates Deposit purchased by Banks - - Money Supply (M ) Money Multiplier M (M /Monetary Base) Money Supply (M ) - - Money Multiplier M (M /Monetary Base) Money Supply (M ) - - Money Multiplier M (M /Monetary Base) Estimates, subject to revision * Currency Issued = Currency in circulation outside Banks + Cash at Banks

6 Money Supply M increased by 0.7%, driven by a 0.9% increase in Monetary Deposits Monetary Deposits (left axis) % Change in M1 (right axis) % 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% Money Supply M decreased by 0.6%, due to a reduction 1.5% in Quasi-Monetary Deposits Quasi- Monetary Deposits (left axis) % Change in M2 (right axis) % 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% Money Supply M decreased by 0.5% due to a reduced M. However, Government Deposits increased by 0.1% Government Deposits (left axis) % Change in M3 (right axis) 3.0% 1.0% -1.0% -3.0% Source: RSD - CBUAE

7 Monetary Base expanded by 1.1% during August Change in Monetary Base (right axis) Banks Required Reserves Certificates Deposit purchased by Banks Currency Issued Banks & OFCs' Excess Reserves % 15.0% 10.0% 5.0% 0.0% % % % Source: CBUAE