SBI Research sees 70% money supply normalisation

TIL Desk/World/Business/Currency circulation is likely to normalise by the end of February as nearly 70 per cent of the notes will be remonetised by then, a report said today. “We are still maintaining that 70 per cent of the notes will be remonetised by February-end,” said the report brought out by SBI Research.

The report said with transactions at the fuel pumps amounting to Rs 4.5 trillion on an annualised basis, even a 20 per cent shift to digital would mean a saving of Rs 1 trillion. “Hence normalcy will return most likely by the end of February.”

As per the latest RBI data on currency in circulation, the newly-supplied currency till January 13 was around Rs 7 trillion, which means roughly 70 million pieces of notes of different denominations are being printed per day.

It translates into around 1.8 billion pieces a month by the currency printing presses, it said. Till December 19, 2016, the RBI had said that around Rs 5.9 trillion notes were remonetised. Hence, during the intervening period of December 19 and January 13, about 1 trillion worth of notes have been printed.