Q. Which of the following statements regarding new monetary aggregates set by RBI is/are correct?
1. New monetary aggregates are recommended by Dr. Y.V. Reddy.
2. Committee was recommended four monetary aggregates.
Select the correct answer using the codes given below:
Answer: C
Notes:
The RBI has started publishing a set of new monetary aggregates following the recommendations of the Working Group on Money Supply: Analytics and Methodology of Compilation (Chairman: Dr. Y.V. Reddy) which submitted its report in June 1998.
- The Working Group recommended compilation of four monetary aggregates on the basis of the balance sheet of the banking sector in conformity with the norms of progressive liquidity: M0 (monetary base), M1 (narrow money), M2 and M3 (broad money).
- In addition to the monetary aggregates, the Working Group had recommended compilation of three liquidity aggregates namely, L1, L2 and L3, which include select items of financial liabilities of non-depository financial corporations such as development financial institutions and non-banking financial companies accepting deposits from the public, apart from post office savings banks.
Source: TMH Ramesh Singh
