OREANDA-NEWS. November 30, 2009. According to CBR, Russia's M2 money supply (national definition) stood at RUB13,874.7bn, an MoM increase of 1.6%. The YoY figure now stands at +3%. CBR had earlier reported that the monetary base increased by 4.6% in October, reported the press-centre of OTKRITIE Financial Corporation.

View: We regard this data as positive since sustainable growth of the money supply diminishes the risk of “money hunger,” which could undermine economic recovery. However, the growth is mainly attributable to emission activity of the monetary authorities rather than to an expansion o credit by the banking system.

The remaining ‘frozen credit’ signifies that the real economy is still suffering from a lack of funding. Moreover, YoY growth was posted mainly because October 2008 was a month of severe monetary squeezing amid increasing capital flight. The current level of the money supply is still lower than it was in the months prior to October 2008.