Money Supply (M3)

Money Supply Growth
Currency in Circulation Growth

The money supply refers to all the currency and liquid instruments in a country's economy. An increase in the supply of money typically lowers interest rates, which in turn, generates more investment and puts more money in the hands of consumers and businesses, thereby stimulating spending. However, the opposite can occur if the money supply falls or when its growth rate declines.

In India, the RBI influences money supply available to the public through the requirements placed on banks to hold reserves, how to extend credit and other regulations. Economists analyze the money supply and develop policies revolving around it through controlling interest rates and increasing or decreasing the amount of money flowing in the economy. Public and private sector analysis is performed because of the money supply's possible impacts on price level, inflation, and the business cycle.

The various types of money in the money supply are generally classified M0, M1, M2 and M3, and reflects the different types of liquidity each type of money has in the economy:

  • M0 and M1 ( also called narrow money) includes coins and notes that are in circulation and other money equivalents that can be converted easily to cash.
  • M2 includes M1 and, in addition, short-term time deposits in banks and certain money market funds. These assets are less liquid than M1 and not as suitable as exchange mediums, but they can be quickly converted into cash or checking deposits.
  • M3 includes M2 in addition to long-term deposits. It is the broadest measure of an economy's money supply. It emphasizes money as a store-of-value more so than as a medium of exchange - hence the inclusion of less-liquid assets in M3.

The money supply refers to all the currency and liquid instruments in a country's economy. An increase in the supply of money typically lowers interest rates, which in turn, generates more investment and puts more money in the hands of consumers and businesses, thereby stimulating spending. However, the opposite can occur if the money supply falls or when its growth rate declines.

In India, the RBI influences money supply available to the public through the requirements placed on banks to hold reserves, how to extend credit and other regulations. Economists analyze the money supply and develop policies revolving around it through controlling interest rates and increasing or decreasing the amount of money flowing in the economy. Public and private sector analysis is performed because of the money supply's possible impacts on price level, inflation, and the business cycle.

The various types of money in the money supply are generally classified M0, M1, M2 and M3, and reflects the different types of liquidity each type of money has in the economy:

  • M0 and M1 ( also called narrow money) includes coins and notes that are in circulation and other money equivalents that can be converted easily to cash.
  • M2 includes M1 and, in addition, short-term time deposits in banks and certain money market funds. These assets are less liquid than M1 and not as suitable as exchange mediums, but they can be quickly converted into cash or checking deposits.
  • M3 includes M2 in addition to long-term deposits. It is the broadest measure of an economy's money supply. It emphasizes money as a store-of-value more so than as a medium of exchange - hence the inclusion of less-liquid assets in M3.
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SUBJECT Variables
It refers to all the currency and liquid instruments in a country's economy. This page contains current and historical values on money supply and comparison with global peers.
Money Supply (M3) | India | 2010 - 2024 | Data, Charts and Analysis
Current and historical data on India's Money Supply (M3) - sources, components, currency in circulation, and comparison with global peers.
2010,2011,2012,2013,2014,2015,2016,2017,2018,2019,2020,2021,2022,2023,2024,actual,amount,amounts,analysis,annual,bank,banking,banknotes,chart,charts,cic,circulation,coins,compared,comparison,composition,currency,current,data,denomination,denominations,economy,figure,figures,global,graph,graphs,growth,historical,india,indian,indicator,indicators,info,information,level,levels,m3,money,notes,rate,sector,sources,statistics,stats,supply,value,values,world,year,yearly
01/04/2010 To 31/03/2024
Money Supply Growth
Currency in Circulation Growth
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Money Supply Growth
Currency in Circulation Growth
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MONEY SUPPLY
Amount & Growth
Source: Reserve Bank of India
  • The supply of money (M3) in the Indian economy remained almost stagnant in 2023-24 to touch ₹223,332 billion, in comparison to 223,438 billion in 2022-23.
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Composition
Source: Reserve Bank of India
As of last Fri of March

Slight difference with values in Currency in Circulation (CIC) graph below exist as values here are as of last Friday of March while the values in CIC table are as of 31 March.

  • ₹166,690 billion (74.6% of the total money supply) in 2023-24 was in the form of time (fixed) deposits with the RBI - the lowest ratio since at least 2010.
  • ₹32,783 billion (14.7% of the total money supply) in 2023-24 was in the form of currency notes and coins in circulation with the general public - the highest ratio since at least 2010.
  • ₹23,859 billion (10.7% of the total money supply) in 2023-24 was in the form of demand and other deposits with the RBI.
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Sources
Source: Reserve Bank of India
  • The net non-monetary liabilities of the banking sector in 2023-24 were ₹39,674 billion (17.8% of the total M3 money supply), in comparison to ₹41,935 billion (18.8% of the total M3 money supply) in 2022-23.
  • The bank credit to the commercial sector was close to a decadal high of ₹144,235 billion (64.6% of the total M3 money supply) in 2023-24
  • The bank credit to the government sector in 2023-24 was ₹69,161 billion (31% of the total M3 money supply), in comparison to ₹71,655 billion (32.1% of the total M3 money supply) in 2022-23.
  • The net foreign exchange (forex) assets of the banking sector totaled ₹49,311 billion (22.1% of the total M3 money supply) in 2023-24
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