Money Supply up 3.5% in July.

Money supply (M3) grew by 3.5% mom in July to reach $43.9 bn and increased 14.2% ytd, down from 26.5% growth in 7M05. The monetary base grew by 2.5% mom in July and was down 0.7% ytd against 23.5% growth in 7M05. Commercial banks’ correspondent accounts at the national bank (NBU) shrank by 48.4% ytd, as a result of the NBU’s loosening of requirements in order to spur liquidity. The reduction in correspondent accounts was roughly matched by growth in commercial banks’ lending and in NBU refinancing.