## Global Liquidity through the Lens of Monetary Aggregates

_IMF Working Papers, January 24, 2014_

## Source details

**Canonical URL:** [Global Liquidity through the Lens of Monetary Aggregates](https://www.imf.org/en/publications/wp/issues/2016/12/31/global-liquidity-through-the-lens-of-monetary-aggregates-41272)

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## Bibliographic details
- Authors: Kyuil Chung, Jong-Kun Lee, Elena Loukoianova, Hail Park, Hyun S Shin
- Published: January 24, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475514551.001

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### Summary and central findings
- The 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 coincide with domestic currency appreciation; such periods of rapid exchange rate appreciation coincide with increases in the central bank’s foreign exchange reserves, increasing the stock of narrow money.
- Non-core bank liabilities that reflect the activities of NFCs capture broad credit conditions and predict global trade and growth.

### Data, scope, and methods
- The analysis uses cross-country panel data on monetary aggregates and other measures of non-core bank liabilities.
- Focus of subject matter: Asset and liability management; Balance of payments; Capital inflows; Commercial banks; Currencies; Financial institutions; International liquidity; Monetary aggregates; Money.

### Policy implications and interpretations highlighted
- Monitoring monetary aggregates and non-core bank liabilities can provide a lens on how NFCs’ international financing affects domestic funding conditions and credit availability.
- Changes in narrow money linked to central bank foreign exchange reserve accumulation should be considered when assessing the domestic impact of capital inflows and exchange rate appreciation.
- Measures of non-core liabilities that capture NFC-related activities can serve as indicators for broader credit conditions and as predictors for global trade and growth.

*This content unit summarizes the IMF Working Paper "Global Liquidity through the Lens of Monetary Aggregates".*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/global-liquidity-through-the-lens-of-monetary-aggregates-41272_