Iraqi Dinar Discussion Board

[Panhead]

The M0 is the monetary Base, Its titled as such in the KFI's. It is the net addition of the FX assets plus the domestic assets. In Iraqs case it is also equal to the Currency in circulation plus the total bank reserves. It is also equal to the net assets. It also includes the M1 and M2. the M2 includes the M1. The M1 is the physical currency plus deposits. The currency in circulation is the M1 less physical deposits. The M2 is the money supply. The M1 and M2 is simply a breakdown of the M0. Some central banks have a break down of the M0 to M1, M2, M3, M4, M5, and M6.

Iraq has a simple breakdown of the MO as it is a small Central Bank. Until recently the M2 was the only defined component of the MO, They added the M1 component last year and both are calculated int he KFI's along with the Monetary base.

http://moneyterms.co.uk/m0/