Money supply grows highest in a decade

Money supply growth in the country accelerated last month to the fastest in at least a decade, the central bank data showed today.

The M3 measure of the money supply increased 22.5 per cent in the two weeks through October 26 from a year earlier, compared with 21.8 per cent in the previous two weeks, the Reserve Bank of India (RBI) said in an emailed statement in Mumbai. That is the fastest increase since at least September 1997, according to the data compiled by Bloomberg.

M3, which mainly comprises currency in public circulation, bank deposits and money invested in other saving plans, stood at Rs 36.1 trillion ($921.3 billion) on October 26.

The measure has risen at an average rate of 21 per cent since April 1, when the current financial year began. This is more than the central bank's target range of 17 per cent to 17.5 per cent for this financial year.