MEASURING THE HEALTH OF CYPRUS ECONOMY
On the 4th of October, 2023 The President of the United Cyprus Republican Party, Mrs. Ioulia Khovrina Komninos (Ιουλία Χωβρίνα Κομνηνός), attended the 1st Annual Conference of the Central Bank of Cyprus.
During Q&A session Mrs. Komninos raised an important question of prevailing trend of velocity of money in Cyprus. The Governor of the Central Bank of Cyprus, Mr. Constantinos Herodotou, took initiative and answered the question.
The audio transcript is published on our YouTube channel:
https://www.youtube.com/watch?v=BiOPCIDe63k
In the follow up the email was sent by ERKK to the Central Bank of Cypurs on 7/10/2023:
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We, as a political party, are confident that CB of Cyprus has a window for cooperation with active members of Cyprus civil society, we are a part of.
It is natural for the Republic of Cyprus, having lost their monetary sovereignty to ECB, to see some available spaces for the analysis of the state of the Cyprus economy.
As was mentioned in your Q&A session, measuring velocity of money is a vital tool for accessing the health of economy and/or in fact - the health of banking system.
Our political party is constantly monitoring the health of the Cyprus economy and the banks.
By this follow up email we would like the CB of Cyprus to provide us with available most recent data on M1 and M2 money aggregates regarding Cyprus.
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On 20/10/2023 we have received the following reply from the Central Bank of Cyprus:
[Quote]
We would like to inform you that Cyprus’ contribution to the euro area M3 is published in the Central Bank of Cyprus (CBC) website here, while Currency in circulation is published in the European Central Bank website here.
Moreover, it should be noted that as from January 2008, when Cyprus joined the euro area, Cyprus’ monetary aggregates were replaced by the so-called “Cyprus contribution” to euro area aggregates. As explained in the Manual on MFI balance sheet statistics, the Cyprus contribution is calculated in a way that when summed up with all other euro area countries’ contributions, result to the euro area aggregate, which is used in the context of the Single Monetary Policy.
Moreover, the national contributions to euro area M3 are not the same as national monetary data before entry into the euro area. Before entry into the euro area, national monetary aggregates comprised instruments issued by domestic Monetary Financial Institutions (MFIs) and held by the domestic money-holding sector. However, in the context of the euro area aggregates, the concept of residency changes as follows: for each euro area country, the national contribution to euro area aggregates relates to the monetary instruments issued by MFIs resident in the country and held by the money-holding sector throughout the euro area (i.e. by residents of the same country and residents of all other euro area countries). Similarly, the national contributions to counterparts of M3 reflect a euro area rather than a national residency perspective.
Regarding your request for (the Cyprus contribution to the euro area) M1 and M2, please note that these aggregates can only be made available to you once published by the CBC. In the context of restructuring our publications and taking into account the user needs, the Statistics Department plans to publish the said data in its monthly publication “Monetary and Financial Statistics”, in the near future.
[Unquote]
Our political party is constantly monitoring the health of the Cyprus economy and the banks and will inform the public about the trend of the velocity of money trend in Cyprus when relevant statistic will be available.
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