Total liquid assets (M4) decreased in May by HRK 0.9bn (0.3%), having reached HRK 291.1bn as at the end of the month (Table 1). As regards the structure of the M4 monetary aggregate, money (M1) increased by 1.4% in May, while quasi-money decreased by 1.0%. However, excluding the impact of the exchange rate strengthening, M4 grew by 0.2% in May. The M4 annual growth has been decelerating since early 2017 (Figure 1), primarily as a result of declining household foreign currency deposits. Specifically, M4 recorded annual growth of 3.4% in May (excluding the impact of exchange rate changes), compared with 5.3% in 2016. Money (M1) continued to grow strongly amid low interest rates on time deposits and an economic and lending recovery, although its annual growth rate decelerated from 22.7% in April to 18.9% in May. In contrast, quasi-money decreased in May both on the monthly and annual basis.

Figure 1 Monetary aggregates annual rates of change	Figure 2 Placements annual rates of change based on transactions
Source: CNB.

Monetary institutions' placements to domestic sectors (excluding the government) recorded growth (transaction-based) in May 2017 for the fourth consecutive month. The annual growth of placements accelerated slightly from 0.8% in April to 1.0% in May (Figure 2) on the back of a continued increase in household lending and favourable trends in placements to corporates. The annual growth of household and corporate placements accelerated in May to 1.9% and 1.1% respectively (transaction-based) (Table 2). In contrast, the stock of total placements decreased in May by HRK 3.2bn (1.5%) to HRK 219.3bn. This was mostly due to the sale of one bank's non-performing placements in the total gross book value of HRK 3.3bn in the second half of May. The stock of placements decreased by 2.6% in nominal terms, primarily because of the sale of non-performing placements and, to a smaller extent, due to the strengthening of the kuna versus the euro.

Table 1 Short consolidated balance sheet of monetary institutions

in billion HRK and %

¹ The sum total of asset items 2.2 to 2.8 of Bulletin Table B1: Consolidated balance sheet of monetary financial institutions.
² The sum total of liability items 2 to 5 of Bulletin Table B1: Consolidated balance sheet of monetary financial institutions.

Source: CNB.

Table 2 Placements (excluding the central government) and main components

in billion HRK and %

¹ In addition to placements to households and corporates, they also include placements to the local government and other financial institutions.
² The transactions show changes that exclude the effects of exchange rate changes, securities price adjustments and write-off of placements, including the sale of placements in the amount of their provisions.

Source: CNB.

For detailed information on monetary statistics as at end-May 2017, see:

Central bank (CNB):

Other monetary financial institutions