ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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MONEY AND BANKING- Expansion Resumed

Expansion Resumed AFTER having registered a sizeabl contraction of Rs 666 crores during September, money supply with the public (M,) showed a rise of Rs 455 crores or 2 per cent in October. This compared with an expansion of Rs 455 crores in October 1978. Currency with the public rose by Rs 426 crores and deposit money by a small amount of Rs 29 crores; the respective figures for October 1978 were Rs 344 crores and Rs 101 crores. Bank credit to the commercial and government sectors exerted the major expansionary influence on money stock. Expansion in bank credit to the commercial sector at Rs 520 crores marked a more than four-fold increase as compared with the rise of Rs 110 crores in September 1979. Compared with that in October 1978, however, the increase was only marginal. It may be pointed out that the expansion in bank credit to the commercial sector during this year either on monthly, season-wise or financial year basis is not comparable with the trends in 1978 for the reason that in this year's data credit extended through participation certificates (PCs) has been rightly included. Even so, the increase in bank credit this year is far above the levels of earlier years. Similarly, net Reserve Bank credit to government which had showed a decline of Rs 1,130 crores in September rose by Rs 491 crores. The rise in October 1978 had been only Rs 120 crores. Foreign assets were up by Rs 120 crores.

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