Currency with the public has reached a record high level of over Rs 18.5 lakh crore, more than double from a low of about Rs 7.8 lakh crore it had hit post-demonetisation 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 Rs 19.3 lakh crore, from a low of about Rs 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% of the currency in circulation at that time being invalidated overnight by scrapping the then Rs 500 and Rs 1,000 bank notes.
The public was given time to deposit the invalidated notes in banks, which saw nearly 99% of banned notes coming back into the system.
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