Global Liquidity through the Lens of Monetary Aggregates

By Kyuil Chung, Jong-Kun Lee, Elena Loukoianova, Hail Park, Hyun S Shin

January 24, 2014

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Kyuil Chung, Jong-Kun Lee, Elena Loukoianova, Hail Park, and Hyun S Shin. Global Liquidity through the Lens of Monetary Aggregates, (USA: International Monetary Fund, 2014) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines how the financial activities of non-financial corporates (NFCs) in international markets potentially affects domestic monetary aggregates and financial conditions. Monetary aggregates reflect, in part, the activities of NFCs, who channel capital market financing into the domestic banking system, thereby influencing funding conditions and credit availability. Periods of capital inflows are also those when the domestic currency is appreciating, and such periods of rapid exchange rate appreciation coincide with increases in the central bank’s foreign exchange reserves, increasing the stock of narrow money. The paper examines economic significance of cross-country panel data on monetary aggregates and other measures of non-core bank liabilities. Non-core liabilities that reflect the activities of NFCs reflect broad credit conditions and predict global trade and growth.

Subject: Asset and liability management, Balance of payments, Capital inflows, Commercial banks, Currencies, Financial institutions, International liquidity, Monetary aggregates, Money

Keywords: Banking sector, Broad money, Capital inflows, Carry trade, Commercial banks, Corporate deposits, Currencies, Foreign currency, Global, Growth variable, International liquidity, Monetary aggregates, Money stock, Money supply, NFC deposit, Offshore bond issuance, Solid windowtext 1pt, U.S. dollar, Unit of account, WP

Publication Details

Pages:

49
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/009
Stock No:

WPIEA2014009
ISBN:

9781475514551
ISSN:

1018-5941

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