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Azerbaijan sees decline in broad money

27 April 2009 14:00 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. As of April 1, M2 broad money reached AZN 4 741 million, up 7.1% from a year ago, said the Central Bank of Azerbaijan.

However, M2 money supply declined by 22% during the first quarter (January-March) this year. Cash money dwindled by 9.9% or AZN 523.8 million in March while its share in M2 money supply remained almost unchanged at 69.7%.

M2 money supply includes total cash in circulation outside banks (M0), the amount in demand accounts, current accounts, term deposits in national currency.

In parallel, M3 broad money which includes M2 plus bank deposits in hard currency also started to drop from early this year, a first downswing during the past decade.

M3 money supply declined by AZN 2 096.8 million or 24.7% during the first quarter and AZN 931 million or 12.7% in March alone.

According to the Central Bank, M2/GDP ratio which measures the extent of monetization of the economy reached 27.2%. Money multiplier stood at 1.3.

Besides, manat monetary base decreased by 22.6% during the first quarter to AZN 3 702.1 million.