OREANDA-NEWS. October 28, 2009. According to the Central Bank, the M2 money supply grew 2.6% MoM in September to RUB13.65tr. For the first time this year, the YTD figure turned positive, posting a 1.2% expansion, reported the press-centre of OTKRITIE Financial Corporation.

View: The M2 money supply grew 2.6% MoM in September, despite a 2.4% MoM decrease in the money base, implying an increase in money multiplier that hints at improvements in banking sector confidence.

However, according to CBR banks were not expanding their loan portfolios in September-October. Indeed, portfolios even shrank slightly. We believe this growth in the money supply to be financing growth in asset prices. Nevertheless we see expansion of M2 as a positive sign, indicating higher economic activity and improved expectations.