Money: Monetary Survey

  • Posted on: 1 December 2010
  • By: radmin

METHODOLOGY FOR COMPILATION OF MONETARY SURVEY DATA.

I. INTRODUCTION

This statement explains in brief, the sources of data used in and how money and banking statistics (commonly referred to as the monetary survey) is compiled in Uganda.

II. SOURCES OF MONETARY DATA

The monetary data currently compiled consists of the Central bank – Bank of Uganda, and 18 commercial banks, 3 of which are under liquidation. Data relating to the closed banks will o­nly be excluded upon completion of the liquidation process. Data for central bank is reclassified from the balance sheet that is produced monthly. o­n the other hand, the BS 100 report form for commercial banks is the main source of the data o­n commercial banks. This is also produced o­n a monthly basis.

III. METHODOLOGY

a. Central bank balance sheet.
The process of compiling monetary data for the central bank is premised o­n the reclassification of the balance sheet into the following broad categories of aggregates;
1. Net Foreign Assets (NFA)
2. Net Domestic Assets (NDA)
3. Base money

NFA = External assets – Foreign liabilities.
NFA consists of the external assets of the central bank; the balances abroad and any investments, less the foreign liabilities. The latter consists mainly of Uganda’s liability to the IMF. Also of interest are the Foreign Reserves, which is the sum of balances in foreign currencies that are convertible and available for BOP transactions.

NDA = Claims o­n Central Government (net) + Claims o­n Public Entities + Claims o­n Private Sector + Claims o­n Commercial Banks + Other Items (net)
¨ BOU is the main banker of the Central government. As such, some government accounts will have credit balances and others will be overdrawn. The net of these accounts is the claim o­n or liability of BOU, as far as Government is concerned. In addition, BOU may be holding Government securities, and these are included in the calculation.
¨ Some parastatals have borrowed from BOU. This liability is recorded as a domestic asset of BOU.
¨ Claims o­n the private sector currently consist of overdrawn balances of Insurance companies etc. The sum is netted against non-bank, non-Government deposits.
¨ Claims o­n commercial banks consist of overdrawn transaction accounts, and other accounts related to the closed banks, Development Finance Department (DFD) loans and receivables as well as Administered Funds.
¨ Other items (net) consist of other assets and other liabilities of the central bank, which are not classified elsewhere. These include revaluation of assets, capital and reserves and the fixed assets.

Base money consists of currency issued by BOU and transaction balances of operating commercial banks and commercial bank investment in BOU instruments. It excludes the accounts of closed banks and balances o­n accounts into which amounts recovered from loans are deposited.

b. Commercial banks’ balance sheet
Similar to the Central bank, the data in the consolidated BS 100 form of commercial banks is reclassified into the following broad categories of aggregates;
1. Net Foreign Assets (NFA)
2. Net Domestic Assets (NDA)
3. Deposit Liabilities to the non-bank public

NFA = External assets – Foreign liabilities.
External assets of the commercial banks consists of their credit balances abroad, lending to non-residents (irrespective of currency) and any holding of foreign currencies in the vaults. Foreign liabilities are liabilities due to banks abroad, deposits of non-residents irrespective of currency, and administered funds from external sources.

NDA = Claims o­n Central Government (net) + Claims o­n Public Entities + Claims o­n Local Government + Claims o­n Private Sector + Claims o­n Bank of Uganda +Cash in vaults + Other Items (net)

  • Claims o­n the central government consist of any banks’ lending to the central government, holding of the Government securities, less the accounts of government in the banks.
  • Claims o­n public entities or parastatals consist of lending by the banks to these enterprises
  • Claims o­n the local government are the banks’ lending to the local government.
  • Claims o­n the private sector currently consist of loans to the resident private sector classified by currency of loan.
  • Claims o­n BOU is a net position of the banks’ balances at BOU as recorded in the BS 100 (both credit and overdrawn balances), and investments if any in BOU papers.
  • Cash in vaults of commercial banks in shillings.
  • Other items (net) consist of other assets and other liabilities of the commercial banks, which are not classified elsewhere. These include revaluation of assets, capital and reserves and the fixed assets.

Deposit liabilities to the non-bank public is the sum of foreign currency denominated deposits plus the shilling demand, time, savings and certificates of deposit (CD) of the resident private sector.

c. The monetary survey.
This is the sum of the aggregates in the two balance sheets. The NFA in both balance sheets is summed up, and the level of the foreign reserves of the central bank is reported separately.

NDA also sums up the corresponding components. But, the claims o­n each other net out as the Reporting Error in OIN.

Broad money - M3. This is derived as:
Currency in circulation derived as currency issued by BOU less cash in vaults of banks
+ Demand, time and savings deposits = M2
+ Certificates of deposits = M2A
+ Foreign currency deposits = M3
The aggregates in the monetary survey should balance viz, NFA + NDA = M3.

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