The government securities, including securities accounts of the Bank by issuing treasury. Bank offers cash reserves for banks operating system by buying securities thereby increasing its assets. A rise in government securities held by central banks led to an increase in the money supply. In addition, the Bank may provide reserves to the banking system by the bank for the loan discount. A rise in loan discount can also be a source of increasing the money supply. When the Bank provides banking system adds a reserve currency, the deposits increased a
multiple of this amount. This process is called a multiple deposit creation.
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