OREANDA-NEWS. March 31, 2009. In February 2009, M3 broad monetary aggregate decreased as a result of transactions by LTL 264.6 million to LTL 43.0 billion at the end of the month, reported the press-centre of Bank of Lithuania.

In a month, money M2 curtailed by LTL 197.2 million due to transactions and at the end of February made up LTL 42.4 billion. Because of transactions, money M1 shrank by LTL 482.0 million and at the end of the month accounted for LTL 21.7 billion. At the end of February, the annual reduction of all monetary aggregates as a result of transactions was the following: of money M3 - 1.5 per cent, of money M2 - 1.2 per cent, and of money M1 - 15.6 per cent.

A further slowdown of the domestic economy and still favourable conditions for saving were reflected in the M3 composition. In February, as in previous month, overnight deposits and currency in circulation which shrank because of transactions entailed a reduction of M3 by LTL 249.5 million and 232.4 million, respectively. On the contrary, increased deposits with agreed maturity up to 2 years pushed M3 up by LTL 247.8 million, and deposits redeemable at notice up to 3 months stepped M3 up by LTL 37.0 million.

In February, net external assets of MFIs rose by LTL 94.4 million due to transactions. At the end of the month this indicator was negative and totalled to LTL 15.4 billion. The growth of net external assets was driven by an increase of net external assets of other MFIs.

Because of transactions, domestic credit declined by LTL 234.0 million, and its annual growth rate made up 13.6 per cent at the end of February. The main factors behind the curtailment of domestic credit were the reduction of MFIs loans to non-financial corporations and households by LTL 375.7 million and LTL 220.2 million, respectively.

As from mid-2006, the annual growth rates of loans to non-financial corporations and households have been slackening gradually and at the end of February 2009 they accounted for 9.9 percent and 15.6 per cent, respectively. Because of transactions, lending for house purchase over the month saw the lowest growth experienced in the last five years and made up LTL 3.4 million, while the annual growth of this indicator shrank more to 20.0 per cent (it was 56.7% in February 2008). Over the month, consumer credit and other lending to households reduced by LTL 71.3 million and LTL 152.4 million, respectively, as a result of transactions.

During the month, central government deposits dropped by LTL 15.9 million, while longer-term financial liabilities of MFIs increased by LTL 124.3 million. In February, these liabilities stepped up because of an increase by LTL 144.0 million in capital and reserves. However, debt securities over 2 years and deposits with agreed maturity over 2 years contracted by LTL 10.1 million and LTL 9.5 million, respectively.