What is Monetary Base?

Monetary Base is the portion of currency held by a commercial bank's deposit with its central banks reserves.
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Monetary Base or money base is the portion of currency held by a commercial bank’s deposit with its central banks reserves and the total currency circulating in the public. So if the central bank of a country held 6 billion units of currency in reserve and the volume of currency circulating in a country was at 700 million then the monetary base for the country would be 6.7 billion units of currency.

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