Page "Economy of Turkmenistan" Paragraph 4

In 1993 – 1995 Turkmenistan increased monetary base by 20-28 % monthly ; thus prices reacted by a monthly growth of 25 – 43 %. The cash growth in circulation in 1993 – 1995 constituted 47. 8 %.

The issue of cash increased 3 times and made up 7 billion manats.

For the recent years the process of involving internal sources of investment into the sphere of currency turnover and currency accrual has become unprecedented in its scale.

The tendency of the growth of this process and its significance require special study.

It is worth noting that the major factors accounting for the quality of monetary policy are: rate of monetary base growth, rates of changes of velocity of money and rates of real GDP growth.

Transition from a soft to a tougher monetary policy in the middle of 1996 immediately affected the dynamics of prices.

In the world economy one of the most important sources of maintaining high rates of monetary base increase ( though not the only one ) is monetization of a budget deficit – its financing at the cost of issuing money instruments.