What is the issue for the market?

Without a monetary turnover, the normal course of life is impossible. Money was at all times. Cash is released into circulation when commercial institutions issue cash to their customers from special operating cash desks. So what is the issue? This is the process of issuing money into circulation, resulting in a significant increase in money supply. Emission is produced in order to satisfy the additional needs of market entities in the means for conducting negotiable transactions.

Issue - market regulator ?

There are various forms of money issue. Lending is one of them. Banks have the right to issue loans only within the limits of available funds and resources, which are represented by a combination of own, borrowed, and attracted funds. With an increase in prices, there is an additional need for money. And here there is a need for emissions. What is emission in a command economy? This is the release of cash in circulation (according to credit plans). The increase of the monetary shaft is possible only if it fills the real sectors of the economy. If we take Russia, then the main reason for the significant increase in the volume of money supply over the past few years has been the acute deficit of the state budget .

In 1992-1994, it was extinguished due to the issuance of cash in circulation with a parallel reduction in turnover due to a fall in production. Since we have started talking about the issue, it is worth mentioning the term that is often encountered within the framework of this topic. We mean a prospectus for the issue of shares. This document discloses information for investors regarding the alleged release of securities. In the prospectus, as a rule, there is information about the current issue. It contains information about each tranche, the principles of calculating interest payments, a credit rating and other useful information.

Kinds of issue

There are two types of issue: cash and non-cash money. Consider what is the issue of cash? First of all, I must say that it is carried out by the Central Bank. The basis of the emission mechanism, in fact, is the operation of this financial institution with other commercial financial institutions. In addition to lending, other activities of the Central Bank play a significant role in the issuance of cash. In countries with advanced market economies (US, UK, FRG), such transactions include the purchase of valuable government securities, bills of leading companies. For the Russian Federation and other countries with economies in development, an important role is played by the purchase of freely convertible currency from exporting organizations and financial commercial structures.

It is necessary to divide the concepts of "cash issue" and "issue". In the case of issuance, it is not always possible to observe the growth of the money supply in the total turnover, since there are also reverse processes (that is, withdrawal of money: payment of loans, deposit of funds into deposit accounts, liquidation of worn banknotes)). In this case, only the structure of the total money supply is changed. And in the case of the second concept, the opposite is true. After all, in fact, what is emission? This is the direct increase in the monetary shaft.