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Sunday 31 May 2020

Demonetisation of Rs 2,000? Govt says printing stopped for now; sufficient currency in circulation

New Delhi: The government Friday indicated that printing of Rs 2,000 bank notes, introduced post-demonetisation in November 2016, has been stopped for now as there is enough stock in circulation.

Earlier, ThePrint had reported, citing a source, that the printing of Rs 2,000 notes had been stopped “in a bid to slowly reduce their circulation”. It wrote, “The cut in circulation does not mean the Rs 2,000 notes will become invalid. In all likelihood, the denomination will be gradually phased out.”

In a tweet, economic affairs secretary Subhash Chandra Garg said printing of notes is planned as per the projected requirement.

“We have more than adequate notes of Rs 2,000 in the system with over 35% of notes by value in circulation being of Rs 2,000. There has been no decision regarding Rs 2,000 note production recently,” the secretary said.

Soon after the sudden decision to ban old Rs 500 and Rs 1,000 currency notes by the government, the Reserve Bank had come out with the 2,000 rupee note along with a new look 500 rupee note as part of its massive remonetisation exercise. But these notes are again leading to hoarding by cash stashers, according to an intelligence report, said a source.

The old notes of denominations 500 and 1,000 that were scrapped in November 2016 accounted for around 86% of the total currency in circulation at that time.

As of March 2018, the total value of the currency in circulation was Rs 18.03 lakh crore, of which Rs 6.73 lakh crore, or 37%, was in Rs 2,000 notes, and Rs 7.73 lakh crore, approximately 43%, in Rs 500 notes. The remaining was in the lower denominations.

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