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

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Accelerated Monetary Expansion

MONETARY expansion accelerated during the calandar year 1988, in contrast to the trend in earlier years. Money stock M1 rose by Rs 7,106 crore, the highest so far during the present decade. However in per cent terms the growth in M, at 12.6 per cent turned out to be the lowest in the past four years. The contribution of currency and demand deposits to the expansion was in the proportion of 56.8 per cent and 44.8 per cent during the year as compared to 70.1 per cent and 29.1 per cent respectively in 1987. Demand deposits rose by Rs 3,184 crore and currency expanded strongly by Rs 4,034 crore. It may be recalled that the growth of demand deposits were vitiated by portfolio management resorted by the banks. Time deposits increased by Rs 19,038 crore or 18.3 per cent in 1988 as compared to Because of larger growth in M, as well as

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