Currency in circulation has doubled since days after demonetisation: RBI data

Circulation had dipped to 8.9L- cr following note ban

New Delhi, June 10: Currency with the public has reached a record high level of over ` 18.5 lakh crore, more than double from a low of about ` 7.8 lakh crore it had hit post- demonetisation decision in late 2016, as per RBI data.

At the same time, the total currency put in circulation by the Reserve Bank has also more than doubled to over ` 19.3 lakh crore — from a low of about ` 8.9 lakh crore post- demonetisation.

Currency with the public is arrived at after deducting cash with banks from total currency in circulation.

This high level of currency available with the public is in sharp contrast to the reported cash crunch in various parts of the country a few months ago. There has been a fear that hoarding or accumulation of large amounts of cash for various reasons could have triggered an artificial currency crunch.

The figures for both ‘ currency with the public’ and ‘ currency in circulation’ have also exceeded the levels seen before the government’s demonetisation decision on November 8, 2016, that saw nearly 86 per cent of the currency in circulation at that time being invalidated overnight by scrapping the then ` 500/ 1,000 notes.

The public was given time to deposit the invalidated notes in banks, which saw nearly 99 per cent of banned notes coming back into the system.

As per the RBI’s latest disclosure in this regard, people had returned ` 15.28 lakh crore as on June 30, 2017, of the ` 15.44 lakh crore banned currency, or 98.96 per cent, of the scrapped notes to the system.

Since then, the RBI has introduced new denominations of ` 2,000 and ` 200, among others, besides a new ` 500 note.

After the recent cash crunch, the government had announced that printing of ` 500 notes would be stepped up.

While the RBI is yet to announce its final word on processing and verification of all the returned notes, the latest ‘ money supply’ data from the central bank puts the “currency with the public” at over ` 18.5 lakh crore as on May 25, 2018 — up more than 31 per cent from year- ago level.

This is an over two- fold jump from ` 7.8 lakh crore as on December 9, 2016 — the lowest level it had seen after the announcement of the demonetisation decision as people rushed to deposit the scrapped notes.