Tuesday, October 4, 2016

The King is Money Supply...

today the RBI decreased the repo rates by 25 bps points..what does it mean for the economy and business.. money is released and supplied by the RBI in to the system...liquidity will improve and money borrowing will become cheaper..that means more money in the hands of the people..more money means more spending by the people and more profits for the companies..leverage companies have to pay less on the borrowed money..decrease in the stress assests in the economy..but not all it is possible only because the WPI AND RETAIL INFLATION ARE DOWN..so the RBI governor has the room to reduce rates..

India Money Supply M3  1972-2016 | Data | Chart | Calendar | Forecast

Money Supply M3 in India increased to 122289.14 INR Billion in September from 121337.78 INR Billion in August of 2016. Money Supply M3 in India averaged 20315.52 INR Billion from 1972 until 2016, reaching an all time high of 122289.14 INR Billion in September of 2016 and a record low of 123.52 INR Billion in January of 1972. Money Supply M3 in India is reported by the Reserve Bank of India.


HIGHEST                LOWEST                   DATE                  UNIT              FORECAST2021                                                                                       
122289.14            123.52              1972--2016     INR BILLION    225000

MONEY SUPPLY HAS AVERAGE 17% ON CAGR BASIS AND IT IS THE AMOUNT OF MONEY WHICH IS INTRODUCED IN THE SYSTEM..

now many people may argue that liquidity alone wont drive the economy..yes i do agree..the other most important thing to drive the economy is Psychology and the Inner Belief People should have and also to the extent of Demography where India has the biggest Advantage of young population Today i am writing this article which i was awaiting for atleast 3 years to write was because yesterday an analyst from JP MORGAN also spoke about the liquidity supply of money in the economy which is increasing and it will keep on increasing as compared to last few years..
Today the RBI decreased the monetary interest rates..so RBI infused and increased the Money Supply in the ECONOMY..and eventually more money in the hands of the people..so now what will the people do with more money..that you will have to think and guess by yourself if you are wise enough..when you have more money in your pocket..

No comments:

Post a Comment