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Monetary developments: JUNE 2000

28/07/2000 - Press Releases

The twelve-month rate of increase in the liquidity indicator M4N, which is monitored by the Bank of Greece, accelerated in June 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







April-June 2000




8.2% (1)



The acceleration of the twelve-month growth rate of M4N in June 2000 is related with continuing fast credit expansion to the private sector and with the decline of M4N in the second quarter of 1999 due both to the measures taken to contain credit expansion as well as to increases in the share capital of credit institutions by public subscription in that period. As a result of the high twelve-month rates of increase in M4N in the period April-June 2000, the average twelve-month growth rate of M4N in this quarter stood at 8.9 per cent, compared with 7.7 per cent in the previous quarter (March-May 2000). It should be noted 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 considerably (June 2000: 7.6 per cent, May 2000: 5.8 per cent), while the corresponding growth rate of private deposits remained virtually unchanged (June 2000: 10.5 per cent, May 2000: 10.4 per cent). A slight further increase was observed in private holdings of repos (+59 billion drachmas), as yields on repos remain higher than those on deposits and Treasury bills. By contrast, private holdings of money market fund units declined slightly (-56 billion drachmas) in June, while private holdings of government paper with a maturity of up to one year remained virtually unchanged (increase of only 9 billion drachmas). As noted in previous press releases, what matters more is the evolution of total M4N rather than changes in its individual components, as the latter reflect, to a large extent, intra-M4N shifts which do not affect total M4N.

Notes: (1) Provisional data.

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