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Monetary Developments: OCTOBER 2000

08/12/2000 - Press Releases

In October 2000, the liquidity indicator M4N, which is monitored by the Bank of Greece, increased by 221 billion drachmas and its twelve-month rate of increase accelerated further. 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) has recorded the following rates of growth:

12-month percentage changes







August-October 2000



9.7% (1),(2)




The average twelve-month growth rate of M4N in the three months from August to October accelerated to 11.7 from 10.5 in the July-September 2000 period. As mentioned in previous press releases, the high growth rates of M4N in the April-October 2000 period were chiefly associated with the large increase in repos and deposits in foreign currency (the drachma value of which was affected by the appreciation of the US dollar and the Japanese yen), but also reflect a base effect (i.e. the low level of these M4N components in the April-October period of 1999). More specifically, in the April-October 2000 period, repos increased by 2,527 billion drachmas and deposits in foreign currency by 618 billion drachmas, compared with a total increase of M4N by 3,218 billion drachmas. In the corresponding period of 1999, M4N rose by a mere 340 billion drachmas. This was due, as mentioned in previous press releases, to substantial increases in the share capital of credit institutions and to shifts of funds from components of M4N (mainly money market fund units) to equity fund units, i.e. items not included in M4N.

Regarding the evolution of key M4N components, the twelve-month rate of increase in currency in circulation decelerated (October 2000: 6.7 per cent, September 2000: 9.1 per cent). Private deposits (in drachmas and foreign currency) rose by 91 billion drachmas in October 2000, compared with a decrease of 624 billion drachmas in October 1999, and hence their twelve-month growth rate accelerated (October 2000: 9.7 per cent, September 2000: 6.4 per cent). Moreover, private holdings of repos continued to rise in October 2000 (+238 billion drachmas), as repo yields remain higher than yields on deposits and Treasury bills. Private holdings of money market fund units increased slightly (+22 billion drachmas), whereas private holdings of government paper with a maturity of up to one year dropped by 51 billion drachmas. As noted in previous press releases, what is more informative is the evolution of total M4N rather than changes in its individual components, as in many cases such changes largely reflect intra-M4N shifts.

Notes: (1) Provisional data.

         : (2) Revised data.


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