Broad money supply (M2) in September increased by 24.1 trillion soums, or 5.5%, reaching 461.9 trillion soums by October 1. This is the maximum monthly growth for the current year.

Growth driven by soum component

  • money supply in national currency — plus 23.4 trillion soums (+6.4%), to 389.1 trillion;
  • foreign currency deposits — plus 731.6 billion soums (+1.0%), to 72.7 trillion.

The share of the soum component in M2 rose from 83.6% to 84.3%.

Main driver — term deposits

The fastest growth was shown by term and savings deposits: plus 16.8 trillion soums, or 8.4% per month, to 217.1 trillion.

This component accounted for about 70% of the total monthly money supply increase, and its share in M2 grew from 45.8% to 47%.

A significant observation: money is not just entering the economy, but is being placed by the population and business in term deposits. At the current real rate — around 14% with inflation of about 6% — such behavior is rational.

Other components

  • narrow money supply (M1) — plus 6.6 trillion soums (+4.0%), to 172 trillion;
  • demand deposits — plus 5.8 trillion (+6.5%), to 94.7 trillion;
  • cash in circulation (M0) — plus 750 billion (+1.0%), to 77.3 trillion.

Two steady trends

Cash share is declining. A year ago it made up 19.49% of money supply, now — 16.74%. Cash in the economy is growing in absolute terms, but is growing slower than other components.

Dollarization is decreasing. The share of foreign currency deposits in M2 fell from 19.06% a year earlier to 15.74%; since the beginning of the year, the indicator has declined by 2.6 percentage points.

Annual dynamics

Compared to last October, money supply increased by 38.4%, since the beginning of the year — by 22%.

Component breakdown for the year:

  • demand deposits — plus 53.1%;
  • term deposits — plus 51.6%;
  • cash — plus 18.9%;
  • foreign currency deposits — plus 14.3%.

What it means for depositors

The outpacing growth of soum deposits over foreign currency deposits reflects savers' preference for national currency — at high real rates, it provides significantly higher returns.

However, keep in mind: foreign currency deposits are calculated in soum equivalent, so their volume is also affected by exchange rates.

When comparing deposit rates, it is useful to compare soum returns with foreign currency returns — adjusted for exchange rate expectations.

This material is for informational purposes and is not an investment recommendation.