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A monetary contraction in April followed the credit hike in March.
submited on 12.05.2005 in category Political stability | Fiscal affairs | Monetary policy | Macroeconomic developments
submited on 12.05.2005 in category Political stability | Fiscal affairs | Monetary policy | Macroeconomic developments
After the deliberate expansion of credit portfolios in March, commercial banks drove back their balances by end-April.
The M3 aggregate shrank by 0.8% down to BGN 22,023 million. At the same time, total credit to private sector went down to BGN 16,420 million by the first week of May, or down by 3.4%. Such development revealed the inflated credit balances by end-March which were pursued to alleviate the negative effect of BNB restrictive measures enforced after 1 April. In line with that, monetary multiplier, or the ratio of M3 to monetary base, fell down to 3.25 from 3.41 in end-March, to illustrate the overall monetary contraction of the economy.
Fiscal reserve held in the BNB grew by 2.8% in April to reach BGN 4,614 million in the first week of May. The coverage ratio of broad money (M3) with BNB external assets (or the assets of the ‘currency board’) grew by 3.2% in April and stood at 0.607.
The M3 aggregate shrank by 0.8% down to BGN 22,023 million. At the same time, total credit to private sector went down to BGN 16,420 million by the first week of May, or down by 3.4%. Such development revealed the inflated credit balances by end-March which were pursued to alleviate the negative effect of BNB restrictive measures enforced after 1 April. In line with that, monetary multiplier, or the ratio of M3 to monetary base, fell down to 3.25 from 3.41 in end-March, to illustrate the overall monetary contraction of the economy.
Fiscal reserve held in the BNB grew by 2.8% in April to reach BGN 4,614 million in the first week of May. The coverage ratio of broad money (M3) with BNB external assets (or the assets of the ‘currency board’) grew by 3.2% in April and stood at 0.607.
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