Macroeconomic Indicators (14 May 2011)

The year on year growth in money supply as measured by M3 decelerated from 19.3% in 2008-09 to 15.9% in 2010-11, mainly on account of a deceleration in aggregate deposit growth from 19.9% to 15.4% over the period. Reserve Money growth on the other hand accelerated from 6.4% in 2008-09 to 19.1% in 2010-11, mainly due to the expansion of currency in circulation. This resulted in the money multiplier decreasing from 4.8 in 2008-09 to 4.7 in 2010-11 and the incremental money multiplier falling from 13.0 to 4.0 during the same period.