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Monetary developments:SEPTEMBER 2000

10/11/2000 - Press Releases

The twelve-month rate of increase in the liquidity indicator M4N, which is monitored by the Bank of Greece, accelerated in September 2000. More specifically, M4N (which comprises currency in circulation, private deposits in drachmas and foreign currency, as well as private holdings of repos, bank bonds, money market fund units and government paper with a maturity of up to one year) rose as follows:

12-month percentage changes







July-September 2000 average


9.7% (1),(2)

9.7% (1),(2)

12.0% (1)

10.5% (1)

The average twelve-month growth rate of M4N in the three months from July to September accelerated to 10.5% from 9.6% in the June-August 2000 period. The high growth rate of M4N observed since April 2000 was mainly associated with the large rise of repos, of deposits in foreign currency (the drachma value of which was affected by the appreciation of the US dollar and the Japanese yen), as well as with the low base calculation of M4N in the corresponding period of 1999. It has been mentioned in previous press releases that the significant increases in the share capital of credit institutions during the above period of 1999, the measures then taken by the Bank of Greece to restrain credit expansion, as well as shifts from M4N components (mainly money market fund units) to equity type fund units, i.e. items not included in M4N, had a decelerating effect on the liquidity indicator growth in that period. Finally, it should be noted that the acceleration of M4N observed in September 2000 was related to the high rate of credit expansion, mainly to the private sector. It should be recalled that the reference range for M4N growth between the beginning and the end of current year is 5-7 per cent.

Regarding the evolution of key M4N components, the twelve-month rate of increase in currency in circulation accelerated (September 2000: 9.1 per cent, August 2000: 6.9 per cent), as did, albeit less, the twelve-month rate of increase in private deposits (September 2000: 6.4 per cent, August 2000: 6.1 per cent). The twelve-month growth rate of private holdings of repos remained particularly high, while, by contrast, private holdings of money market fund units decreased in September 2000 (-112 billion drachmas) and private holdings of government paper with a maturity of up to one year remained broadly unchanged. As noted in previous press releases, what matters more is the evolution of total M4N rather than changes in its individual components, as in many cases such changes reflect intra-M4N shifts.

Notes: (1) Provisional data

(2) Revised data

Table 1 – Developments in monetary aggregates and liquidity (January – September 2000)

Table 2 – Monetary aggregates and liquid assets (September 2000)

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