Venkatesh Chaturvedi is teaching live on Unacademy Plus
Economic Survey of India - V2 Chapter 3: Monetary Management and Financial Intermediation Lesson 2 J)resented, Venkatesh Chaturvedi
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Terminologies Currency in Circulation: Total value of currency (coins and paper currency) that has ever been issued by the Reserve Bank of India minus the amount that has been withdrawn by it Cash with Banks Currency with the Public: Currency with public is currency in circulation minus the cash with banks. "Rupee coins and small coins in the balance sheet of the Reserve Bank of India include ten-rupee coins issued since October 1969, two rupee-coins issued since November 1982 and five-rupee coins issued since November 1985. Currency with the public is arrived at after deducting cash with banks from total currency in circulation, as reported by RBi" Bankers' Deposits with RBI: balances maintained by banks in the current account with the Reserve Bank mainly for maintaining Cash Reserve Ratio (CRR) and as working funds for clearing adjustments Other deposits with RBl: deposits from foreign central banks, multilateral institutions, financial institutions etc
Terminologies Reserve Money(M0) = Currency in Circulation + Bankers' Deposits with RBI + ,Other, Deposits with RBI Narrow Money(M1) M0 demand account Broad Money(M3)-including both notes and coins, but also more illiquid forms of money-such as bank deposits, treasury bills, etc.
Reserve Money Trend - YoY growth 56 48 40 32 24 16 8 2017-18 2016-17 2015-16 -8 -16 -24 -32
What happened? (MO) during the financial year 2017-18 up to November 10, 2017 increased sequentially but remained in the negative territory From November 17, 2017, as a favourable base effect set in As on December 29, 2017, MO recorded an expansion of 55.9 per cent CIC stood at 94.19 per cent of its predemonetisation level (see figue down)
Broad Money Trend YoY growth 14 1 13 12 2017-18# -2016-17 2015-16 10 9 8 7 6 5