Monetary aggregates are a component of money in the economy.
- Base money (M0) or reserve money refers to the currency in circulation along with the bankers’ deposit with the RBI and other deposits with the RBI.
- Narrow money (M1) refers to the currency in circulation in public plus Demand deposits with banks(current and saving accounts) along with other deposits with the RBI.
- M2 comprises narrow money and saving deposits of post office saving banks.
- Broad money (M3) refers to narrow money plus time deposits with the banking system.
- M4=M3+ all deposits with Post Office saving banks (excluding national saving certificates)s)
