Normalcy returns as currency in circulation crosses pre-demonetisation level
By Express News Service | Published: 31st March 2018 06:21 AM |
Last Updated: 31st March 2018 08:27 AM | A+A A- |
Image for representational purpose only.
MUMBAI: The currency in circulation in the country crossed the pre-demonetisation level at Rs 18.27 lakh crore as on March 23, indicating that full remonetisation is now complete and that currency pumping has resumed the normal course.
The move comes 15 months after the government rolled out the economic reform invalidating high-value notes on November 8, 2016.
The latest RBI data released on Friday shows that the currency in circulation stood at Rs 18.27 lakh crore as on March, 23 as against Rs 13.35 lakh crore a year before. Prior to demonetisation, currency in circulation stood at Rs 17.97 lakh crore, 86.4 per cent of which comprised high-denomination banknotes of Rs 500 and Rs 1,000.
Currency with the public (excluding cash with banks, while currency in circulation includes notes in circulation, rupee and small coins, and deposits with commercial banks in current and savings accounts), stood at Rs 17.52 lakh crore as on March, 16, up from Rs 12.64 lakh crore a year ago. The central bank has been pumping money into the system with an average increase of 0.6 per cent every week.
As on March, 23, the RBI had issued Rs 18.02 lakh crore notes, of which the central bank held a mere Rs 14 crore at banking departments.
What’s unclear, however, is the proportion of high-denomination notes. Demonetisation saw Rs 1,000 notes completely withdrawn from the system, while notes in two new denominations, of Rs 2,000 and Rs 200, were introduced. While Rs 2,000 notes comprised over 50 per cent of the total currency in circulation as on March, 2017, its composition will go down as RBI settles down with the right currency mix, including Rs 500, Rs 200, Rs 100, Rs 50 and Rs 10 notes.
Sources earlier confirmed to The New Indian Express that Rs 2,000 and Rs 500 notes comprised the bulk of total banknotes, while small denomination notes accounted for less than 10 per cent. According to RBI’s annual report, 98.96 per cent of notes (by value) that were invalidated returned to the system.
