Media ININ Economy We Trust
Media In + WAM October 24, 2018
Money in its comprehensive concept “N3” jumped 1.5% from AED 1.557 trillion at the end of August to AED 1.58 trillion at the end of September 2018.
The rise was due to an increase of 3.8% in N2 money supply and AED 10.7 billion in government deposits.
On the money supply side, it dropped 0.8% from AED 488.1 billion in August to AED 484.2 billion at the end of September 2018. This was due to a 1.1% decline in cash deposits despite a 1.2% rise in cash outside banks .
On the other hand, M2 saw an increase of 1% from AED 1.28 trillion at the end of August to AED 1.1291 billion at the end of September 2018, due to a 2% increase and AED 16.1 billion in semi-cash deposits.
During the period from the end of August to the end of September 2018, the monetary multiplier of N1, N2 and N3 increased from 1.38 to 1.39, from 3.61 to 3.71 and from 4.40 to 4.54, respectively.
The slight increase in the monetary multiplier of N1 shows a lower decrease in the money supply of the cash group compared with a faster contraction in the monetary base. While the increase in the monetary multiplier of N1 and 2 reflects faster growth in their monetary groups than the contraction of the monetary base.
The monetary multiplier indicates the extent to which the money supply and its underlying components will grow, following an increase of one billion dirhams in the monetary base, which is defined as the sum of cash issued / traded with the public and cash in banks, and the total reserves of banks with the central bank, With banks.
