In the recent past the velocity has been declining, while multiplier has hovered between 5.0-5.2. In 2007, this trend is expected to continue. 8  BIS Review 8/2007  Table 1 Quarterly targets for reserve money Rs. billion Dec. 2006  Reserve Money Point to Point Change %  2007 Targets  Target  Actual  Mar  Jun  Sep  Dec  227.6  239.8  254.6  250.4  257.8  267.6  15.0  21.2  17.3  17.9  16.1  11.6  Table 2 Indicative targets for broad money (M2b) Rs. billion Dec. 2006  Broad Money (M2b) Point to Point Change %  2007 Targets  Target  Estimates  Mar  Jun  Sep  Dec  1,175.6  1,221.6  1,274.9  1,291.4  1,315.9  1,383.2  15.0  19.5  19.2  19.0  17.9  13.2  The programme also allows for a Broad money growth of 17.6 per cent from the targeted level of Broad money at end 2006. This will reflect an increase in Net Foreign Assets of the banking system of US dollars 200 million, and increase in private sector credit by Rs 147.3 billion (15.5 per cent) and net credit to Government by Rs 16.7 billion. To maintain the overall increase in net credit to the Government at Rs 16.7 billion, net credit to the Government from commercial banks would need to be maintained at Rs 5.2 billion.
I cannot finish without reminding you that tomorrow is the 300th anniversary of the birth of Benjamin Franklin, arguably the greatest of the American founding fathers. During his lengthy stays in England, Benjamin Franklin visited Kent many times. To celebrate his tercentenary the American Brewing Association has produced a new recipe for Franklin’s favourite beer. The hops recommended for the recipe are Kent Goldings. Despite the fears of the demonstrators on Hop Saturday in 1908, the Kent hop industry has not disappeared altogether. The area under planting is certainly much smaller, but research in centres such as Wye College has produced the new hedgerow hops which are recognised worldwide. Employment in Kent, though, has moved into new and more productive sectors. Adapting to changes in the external environment is not easy for any of us- whether running a business or setting monetary policy - but if we do adjust the benefits will accrue, if not to everyone immediately then to the great majority over the years to come. BIS Review 9/2006  3