Currencies
Currency in circulation rises despite Rs 2,ooo note withdrawal
MUMBAI: Despite the withdrawal of Rs 2,000 banknotes, the overall value of the currency in circulation increased from Rs 33.5 lakh crore at the end of March 2023 to Rs 34.8 lakh crore a year later – increasing by Rs 1.3 lakh crore in FY24. However, the rate of growth has been the slowest since 2018.
The share of currency in circulation as a percentage of GDP has declined in FY24 because the 4 per cent increase in CIC is slower than the projected growth in GDP. Last year, CIC saw a year-on-year growth of 7 per cent , while there was a nearly 10 per cent growth in the year before owing to a dash to cash during the pandemic.
Latest data shows that during the week ended April 5, currency in circulation rose 0.5 per cent to Rs 35.3 lakh crore.
According to RBI data on the value of banknotes in circulation, the increased release of Rs 500 notes has more than compensated for the withdrawal of Rs 2,000 notes. RBI had announced their withdrawal on May 19, 2023.
As of March 2024, the value of Rs 2,000 notes in circulation was only Rs 8,202 crore, compared to Rs 3.6 lakh crore a year ago. However, the value of Rs 500 notes has risen to Rs 30.1 lakh crore from 25.8 lakh crore a year earlier. The Rs 500 notes now account for 86.5 per cent of all CIC (in value terms).
The value of Rs 100 and Rs 200 bank notes also increased during the year to Rs 2.1 lakh crore and Rs 1.5 lakh crore, respectively, from Rs 1.8 lakh crore and Rs 1.3 lakh crore last year. Some bankers expect CIC to increase further during the elections.
The share of currency in circulation as a percentage of GDP has declined in FY24 because the 4 per cent increase in CIC is slower than the projected growth in GDP. Last year, CIC saw a year-on-year growth of 7 per cent , while there was a nearly 10 per cent growth in the year before owing to a dash to cash during the pandemic.
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Latest data shows that during the week ended April 5, currency in circulation rose 0.5 per cent to Rs 35.3 lakh crore.
According to RBI data on the value of banknotes in circulation, the increased release of Rs 500 notes has more than compensated for the withdrawal of Rs 2,000 notes. RBI had announced their withdrawal on May 19, 2023.
As of March 2024, the value of Rs 2,000 notes in circulation was only Rs 8,202 crore, compared to Rs 3.6 lakh crore a year ago. However, the value of Rs 500 notes has risen to Rs 30.1 lakh crore from 25.8 lakh crore a year earlier. The Rs 500 notes now account for 86.5 per cent of all CIC (in value terms).
The value of Rs 100 and Rs 200 bank notes also increased during the year to Rs 2.1 lakh crore and Rs 1.5 lakh crore, respectively, from Rs 1.8 lakh crore and Rs 1.3 lakh crore last year. Some bankers expect CIC to increase further during the elections.
