Broad money growth increases to 4.8 per cent

Our Banking Bureau

Mumbai, Aug 28: BROAD money (M3) growth rate at 4.8 per cent, during the first quarter of 2001-02, was up a tad when compared to 4.7 per cent during the corresponding period of the preceding year. The M3 growth, on a year-on-year (YoY) basis, worked out to 16.8 per cent as on June 29, 2001 as compared with 16 per cent as on June 30, 2000.

The annual M3 growth, net of ‘Indian Millennium Deposits’ (IMDs), was lower at 14.6 per cent.

It needs to be recognised that the monetary data as on June 29, 2001 and June 30, 2000 are not strictly comparable as the latter was also the last working day of the quarter and, therefore, includes the full impact of the usual quarter-end bulge in deposits and credit.
On a more comparable basis, inclusive of June-end balance-sheet adjustments, the M3 growth rate, net of the IMD effect, was higher at 15.4 per cent as on July 27, 2001 than the 14.6 per cent as on July 28, 2000.

This was driven by stronger commercial bank time-deposit growth of 16.7 per cent, net of IMDs, than the 15.4 per cent recorded a year ago.

Cash demand increased by 4.3 per cent during 2001-02 (up to July 27) as compared with 3.2 per cent during the corresponding period of the previous year.

M3 increased by 16.7 per cent during 2000-01 as compared with an expansion of 14.6 per cent during the previous year. The M3 growth rate, net of IMDs, remained broadly within the 15 per cent projection announced in the April 2000 monetary and credit policy statement. On a monthly average basis, the M3 growth rate (net of RIBs/IMDs) decelerated to 15 per cent during 2000-01 from 16.7 per cent during 1999-2000 and 18.2 per cent during 1998-99.