Money supply M0 increased from AED 65.2 billion at the end of April 2014 to AED 69.1 billion at the end of May of the same year (6.0%), while M1 increased from AED 426.3 billion to AED 428.5 billion (0.5%), M2 increased from AED 1,123.7 billion to AED 1,125.9 billion (0.2%), and M3 increased from AED 1,293.0 billion to AED 1,318.2 billion (1.9%). During the first five months of 2014, there has been an increase of 8.1% in M0, 12.9% in M1, 6.5% in M2 and 8.1% 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 1.5 at the end of May 2014 i.e., at the same level of the previous month, whereas the multiplier of M2 decreased from 4.1 at the end of April to 4.0 at the end of May and that of M3 decreased from 4.7 to 4.6. The decrease in the money multipliers of M2 and M3 was mainly due to an increase in Currency in Circulation by AED 3.5 billion and an increase in Banks’ Current Accounts at CBUAE (Net) by AED 6.8 billion.
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