The monetary base, the sum of banknotes and current accounts at the Bank, is increasing by 14 percent on a year-on-year basis. However, the growth rate of money supply is only 3.6 percent on the same basis, somewhat higher than at the beginning of this year, mainly due to a shift of funds from maturing postal savings.
More serious is the fact that bank lending is contracting at 1.9 percent year-on-year and the pace of this decline has been accelerating somewhat. GDP and price conditions also have not shown any improvement. Business capital spending and housing construction do not seem to be stimulated by the historically low interest rates. IV. The Monetary Policy and Prices  A.