According to the monetary statistics of the Central Bank (BCRD) the M1 indicator (money in the hands of the public) was RD$747,813.6 million which, compared to the RD$751,446.6 million that circulated in December of last year 2022, shows a smaller number of banknotes and coins in circulation.
The M1 is a monetary indicator referring to the banknotes and coins in the hands of the people, the money that the public has liquid to mobilize in economic activityincluding transferable deposits.
The indicators or monetary aggregates they comprise the M1, referred to the circulating in national currency; to M2, which includes M1 and other deposits and securities issued both in pesos and in dollars by the OSDs (other deposit companies) and by the BCRD; and M3, which includes the expanded money supply, that is, M1 and M2 plus deposits and share values ​​in foreign currency.
It is inferred that the behavior has its reason in the dynamics of Decemberwhich historically mobilizes more money in December, since it is the date of double salary, bonuses and other benefits from private, independent companies, and the Government to their collaborators.
In December 2020, the M1 was RD$564,297 million, in January 2021 it was already RD$619,084.8 million and in December 2021 RD$RD$672,163.9 million. For December 2022, the Circulating Means was RD$751,446.6 million as a sample of the dynamics of economic activities.
The Central Bank publishes the behavior of the variations and, according to the figures, while bills and coins in the hands of the public contracted, transferable deposits of RD$539,433.0 million in national currency increased to RD$554,959.7 million.
Bills and coins in the hands of the public dropped from RD$212,013.6 million to RD$192,853.9 million between December 2022 and January 25, 2023.
Through the expanded money supply, which is known in macroeconomic terms as M2, on January 25, 2023, RD$1,681,683.6 million circulated in the Dominican economy, which also fell on that date compared to December 2022 by RD$4,167.6 million less.
While the M3, which is money in a broad sense, registers a movement of RD$2,313,301.5 million, of which RD$1,681,643.6 million were in foreign currency and RD$631,657.9 million were deposits in foreign currency, as of January 25, 2023.
This indicator, money in the broad sense, reflects the dynamism that took place in the Dominican economy, between January 2020 and January 2021 it fell with RD$24.22.6 million less, but already in January 2023 versus December 2022 it registered an increase of RD $27,096.4 million.
In general, Gross international assets (in dollars) were recorded for US$15,468.9 million, of which correspond to Gross International Reserves US$14,843.8 million and Net International Reserves US$14,837.3 million, for a positive variation of US$2,463.3 million as of January 25 of this year with respect to the same date last year 2022.
International reserves reached a historic figure in 2022, equivalent to 5.6 months of imports and 12.8% of GDP, says the BCRD.
Monetary politics
During 2022, the BCRD continued to implement a gradual monetary restriction plan with the purpose of mitigating global inflationary shocks. In the last two months of 2022, the cycle of increases in the Monetary Policy Rate stopped,
7.83%
The monetary restriction process, together with the fiscal measures implemented to face the higher international prices of raw materials, has contributed to a slowdown in inflation, which has been reduced by 181 basic points from a maximum of 9.64% in April to 7.83% in December 2022.
6.56%
Core inflation, which excludes the most volatile components of the basket and which is one of the main indicators in central bank decision-making, has maintained a downward trend since May 2022, going from a maximum of 7.29% in May to 6.56% at the end of December 2022.