Query Detail : RBI Grade B Phase II

IS M1 MOST LIQUID OR M0? IN A QUESTION U HAVE MENTIONED M1 IS MORE LIQUID THAN M0 BUT M1 CONTAINS CASA TOO BUT M0 CONTAINS ONLY CURRENCY IN CIRCULATION... PLZ EXPLAIN?
Anmol Magotra,   March 29th 2020,  
RBI Grade B Phase II


Hi, 

M0 is the reserve money or Central Bank money and is given as  = Currency in circulation + Bankers’ deposits with the RBI + ‘Other’ deposits with the RBI
OR
= Net RBI credit to the government + RBI credit to the commercial sector + RBI’s claims on banks + RBI’s net foreign assets + Government’s currency liabilities to the public – RBI’s net nonmonetary liabilities
 
it is therefore not used to tell liquidity in the system
 
M1 is the most liquid as it tells the liquidity in the system
 
MI =  = Currency with the public + Demand deposits with the banking system + ‘Other’ deposits with the RBI
OR
Currency with the Public + Current Deposits with the Banking System + Demand Liabilities Portion of Savings Deposits with the Banking System + 'Other' Deposits with the RBI
 

If you are enrolled in Our course then refer to "Monetary aggregates note under RBI & Monetary policy".