Base money is the kind of money with the highest liquidity. As the basis of the market money supply, it has the ability to expand or contract the money supply. Therefore, it is also known as "high-energy money" and "strong money". Generally speaking, base money refers to the sum of the deposit reserve of commercial banks in the central bank and the currency circulating outside the banking system. Since 2017, the Central Bank of China has also included the provision of Payment institutions in the basic currency statistics. As of December 2021, China's total base currency amounted to 32.95 trillion yuan, which is composed of three "currency types", including "currency issuance", "deposits of other deposit companies" and "deposits of non-financial institutions", accounting for 29.2%, 64.5% and 6.4% respectively.
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