Money supply M0 decreased from AED 65.3 billion at the end of March 2014 to AED 65.2 billion at the end of April of the same year (-0.2%), while M1 increased from AED 412.0 billion to AED 426.3 billion (3.5%), M2 decreased from AED 1,124.3 billion to AED 1,123.7 billion (-0.1%), and M3 increased from AED 1,280.2 billion to AED 1,293.0 billion (1.0%). During the first four months of 2014, there has been an increase of 2.0% in M0, 12.3% in M1, 6.3% in M2 and 6.0% in M3.The Money Multiplier
The money multiplier indicates by how much the money supply will grow following an increase of 1 billion Dirhams in the monetary base (currency in circulation + commercial banks' reserves at the Central Bank + certificates of deposit).
The money multiplier of M1 remained unchanged at 1.4 at the end of April 2014 i.e., at the same level of the previous month, whereas the multiplier of M2 increased from 4.0 at the end of March to 4.1 at the end of April and that of M3 increased from 4.5 to 4.7. The increase in the money multipliers of M2 and M3 was mainly due to a decrease in Banks’ Current Accounts at CBUAE (Net) by AED 8.7 billion and a decrease in Certificates of Deposit (Net of Lending) by AED 1.8 billion.
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