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Monetary developments: NOVEMBER 2000

04/01/2001 - Press Releases

The twelve-month rate of increase in the liquidity indicator M4N, which is monitored by the Bank of Greece, decelerated in November 2000. 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 issued with a maturity of up to one year) has recorded the following rates of growth:

12-month percentage changes







September-November 2000 average



13.5% (1)

12.6% (1)

12.7% (1)

The average twelve-month rate of increase in M4N over the September-November 2000 period stood at 12.7 per cent, compared with 11.7 per cent in the August-October 2000 period. The high rates of increase in M4N, observed over the April-November 2000 period, were mainly associated with the strong growth of repos and private deposits in foreign currency (whose outstanding stocks, in drachma terms, incorporate the impact of the appreciation of the US dollar and the Japanese yen), while they also reflect base effects, following the subdued growth in the April-November 1999 period. As mentioned in previous press releases, the April-November 1999 period was characterised by considerable bank capital increases and portfolio shifts away from M4N (notably from money market fund units) towards equity funds units which are not included in M4N. The slowdown in M4N in November 2000 is associated with weaker credit expansion to both the private and the public sectors during that month.

Regarding the evolution of key M4N components, the twelve-month rate of increase in currency in circulation accelerated (November 2000: 7.7 per cent, October 2000: 6.7 per cent). Private deposits (in drachmas and foreign currency) dropped somewhat in November 2000 (-16 billion drachmas), and their twelve-month growth rate declined (November 2000: 7.4 per cent, October 2000: 9.7 per cent). By contrast, private holdings of repos continued to increase (by 331 billion drachmas), as their yields remain higher than those on deposits and Treasury bills. Private holdings of money market fund units decreased in (-151 billion drachmas), while private holdings of government paper issued with a maturity of up to one year demonstrated a slight increase (23 billion drachmas). What is more important for the evaluation of developments in the liquidity of the economy is the evolution of total M4N rather than the rates of change in individual M4N components, as such rates are often largely affected by shifts of funds between these components.


Notes: (1) Provisional data



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