India to print more notes as ATMs dry up

Government vows to print more notes to meet shortfall

Amidst reports of a cash crunch and empty ATMs, Finance Minister Arun Jaitley yesterday sought to allay fears, saying “there is more than adequate currency in circulation”, even as the government blamed “unusual demand” for shortages in some areas.

In a bid to tackle the “unusual” currency demand, the government has also decided to increase printing of Rs500 notes by five times.

Taking stock of the situation, the Reserve Bank of India said there is sufficient cash in the RBI vaults and currency chests. Nevertheless, printing of the notes has been ramped up in all its four note presses.

“Overall there is more than adequate currency in circulation and also available with the banks. The shortage caused by ‘sudden and unusual increase’ is being tackled quickly,” Jaitley said.

Amid reports of a cash crunch and empty ATMs, Finance Minister Arun Jaitley yesterday sought to allay fears, saying “there is more than adequate currency in circulation”, even as the government blamed “unusual demand” for shortages in some areas.

In a bid to tackle the “unusual” currency demand, the government has also decided to increase printing of Rs500 (Dh27.96) notes by five times.

“[We] have reviewed the currency situation in the country. Overall there is more than adequate currency in circulation and also available with the banks. The temporary shortage caused by ‘sudden and unusual increase’ in some areas is being tackled quickly,” Jaitley tweeted.

‘We still have a reserve’

At a hurriedly called press conference, Economic Affairs Secretary S.C. Garg, said: “There is no cash crunch in the country. There is around Rs18 trillion currency supply now, which is close to the circulation during the demonetisation period. We keep Rs2.5-3 trillion more currency in stock for excess demand.”

He said there was unusually high demand for currency in the last couple of months. As opposed to an average demand of about Rs200 billion a month, “in the first 13 days of April itself there was a demand of Rs450 billion”, he said.

In the last few days the government has pumped cash into the system to meet the demand, he said.

“We still have a reserve of Rs1.75 trillion,” he added.

“We have taken steps to increase the supply of currency in case the demand were to go up further.”