Monetary emission: its essence and basic forms

Monetary emission is the process of issuing banknotes and coins into circulation. Experts can talk about its influence on the economy of this or that country for hours, since there are many contradictions. After all, it is considered an instrument capable of leading both to improvements and to worsening in the financial sphere.

First of all, it should be noted that the money issue is a privilege that belongs to the national bank. He regulates the money supply: he issues at a deficit and withdraws as necessary. There are two forms of issuing funds: non-cash and cash. The first is much broader, since in addition to money, issuance of payment means is in circulation. In addition, commercial banks also have the right to conduct non-cash issues, which fundamentally distinguishes it from the monetary form.

The issue of money in Russia corresponds to a number of principles:

• Monopoly, that is, the right to issue banknotes is vested only by the central bank of the Russian Federation and only it decides when and how much to seize or issue them.
• Can be carried out without collateral. Issue of banknotes has no actual provision with gold or other precious metals, and the cost of making a note is much less than their nominal value. In addition, there is no officially established ratio between the national currency and gold.
• Acts as the official means of payment, confirmed by the current Russian legislation, and the only free instrument that can be used in cash settlements with counterparties.
• The Russian ruble can be exchanged for each person who presented an identity document, and in any amount. There are no specific restrictions.
• The government should not specify the time and amount of money to the national bank, especially in the form of an ultimatum.

The increase in cash money supply is carried out with the help of a special unit, called a cash settlement center. It, in turn, includes a turnaround fund and a reserve fund. The first is responsible for the issuance of funds to commercial banks and the receipt of cash in the event of the formation of surpluses. And the reserve fund performs the function of storing funds. And while the banknotes are in this fund, they can not be called money, because they do not perform the basic functions, but are only banknotes.

The settlement and cash center is located in the office of the national bank of the country, which has an issue right. Accordingly, it is he who makes the decision to transfer funds from the reserve fund to the revolving fund. This is done at a time when the inflow of funds does not increase according to planned standards, and several commercial banks need more cash.

Non-cash money issue arises in the process of development and expansion of the scope of lending, so it can be made by other lending institutions. It involves increasing the money in the accounts due to the conclusion of any transaction in the bank. It is believed that this form of emission is primary, that is, first there is an increase in bank accounts, and then there is a need for an increase in the money supply.

It is worth noting that the non-cash and cash form is in constant interaction and periodically takes one kind, then another. For example, when paying for a loan or depositing an increase in non-cash funds. And at the time of withdrawing money from bank accounts , the amount of cash increases. But the concept of "money issue" implies not just a transition from one form to another, and not just a release of money into circulation, but a real increase in the volume of the money supply.