The money in the hands of the people was reduced by RD$10.4 billion between July 29 and August 8

The money in the hands of the public was reduced by RD$10,400 million in just nine days (from July 29 to August 8), registering a smaller movement, going from RD$672, 301.6 million to RD$661,900.6 million in the indicated period.

The cash, bills and coins in the hands of the people, that is, the liquid money available to the public for its operations, known as M1 (Circulating Medium) reflects the results of the monetary policy established by the Central Bank, which seeks to reduce liquidity to curb price inflation of items in the local market.

M1 also includes deposits in pesos that may be transferable.

This low demand is in line with the reduction in demand, as central banks around the world have done to curb the escalation in prices driven by the Russian war in Ukraine and the increases in the prices of raw materials such as oil, and maritime transport, which has resulted in a rise in interest rates (asset rates and deposit rates).

The M1 presents a lower balance compared to July, but it is much higher than 2019, 2020 and 2021, as a result of the sustained growth of the economy.

Cash in circulation reached RD$564,297.0 million in December 2020, RD$597,459.6 million in August 2021, RD$681,811.4 million in December 2021, RD$672,301.6 million as of July 29, 2022 and RD$661,900.6 million as of August 8 in progress.

It is recalled that economic analysts have argued that a reduction in aggregate demand will affect domestic consumption and therefore the growth figures of the gross domestic product (GDP), but most countries have preferred to moderate growth to control inflation, which is considers to have a more negative impact on people.

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In its harmonized statistics, the BCRD presents as monetary aggregates M1, M2, which includes M1 and other deposits, and stock values ​​in national currency; M3, which includes M2 and other foreign currency deposits and securities. As well as the monetary multipliers and the behavior of the exchange rate.

Between July 29 and August 8, M2 fell by RD$7,791.1 million, going from RD$1,544.7 million to RD$1,536.9 million.

According to BCRD data, cut to August 8, the Net International Reserves (NIR) also fell from RD$14,171.0 million on July 29 to RD$14,004.4 million.

The M3, in August was RD$2,129, 298.3 million, more than RD$9,593.1 million. As of August 8, a value of the dollar per peso of RD$54.08 was also recorded.

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