After increasing dramatically between 2015 and August 2018, Government domestic borrowing was brought under control and the stock of public domestic debt began to decline in early 2019
The monetary base has remained essentially unchanged since September 2018, in line with government's efforts to target monetary aggregates. However, there remains a high level of liquidity in the system, which should be controlled through monetary operations (7-day savings bonds) and higher domestic interest rates. Excess liquidity is contributing to exchange rate depreciation.
Bank deposits (a proxy for money supply) have continued to increase in 2019. However, this is due almost exclusively to valuation effects, as the $RTGS value of Nostro FCA accounts increased rapidly due to a sharp depreciation of the $RTGS. Domestic currency bank deposits have remained stable since September 2018, in line with fiscal and monetary restraint.
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