CiC grew by Rs 3,23,003 crore, or 13.2 per cent, to Rs 27,70,315 crore as on January 1, 2021 from Rs 24,47,312 crore as on March 31, 2020, in keeping with current knowledge launched by the Reserve Bank of India (RBI).
In the April-December interval of FY2020, it had grown by almost 6 per cent.
According to Care Ratings Chief Economist Madan Sabnavis, the expansion in forex in circulation to this point within the present fiscal has been excessive as folks had been accumulating more money to meany exigency through the lockdown.
“Whenever there is a crisis-like situation, there is a tendency for households to latch on to cash. That is the reason there has been an increase in demand for cash. What you see is nothing else but a precautionary motive overwhelming everything,” Sabnavis mentioned.
The RBI in its annual report for 2019-20, launched in August 2020, had additionally talked about that demand for forex began to extend within the wake of heightened uncertainty brought on by the COVID-19 pandemic.
The central financial institution additionally took a sequence of measures to be able to meet the improved demand.
During the calendar 12 months 2020, CiC grew 22.1 per cent, or Rs 5,01,405 crore, to Rs 27,70,315 crore as on January 1, 2021.
CiC consists of banknotes and cash. At current, RBI points notes in denominations of Rs 2, Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 200, Rs 500 and Rs 2,000.
Coins in circulation comprise these of 50 paise and Re 1, Rs 2, Rs 5, Rs 10 denominations, and the just lately launched coin of Rs 20 denomination.
As per RBI’s annual report, the worth and quantity of banknotes in circulation elevated 14.7 per cent and 6.6 per cent, respectively, in FY20.
In worth phrases, Rs 500 and Rs 2,000 banknotes collectively accounted for 83.four per cent of the full worth of banknotes in circulation at end-March 2020, with a pointy improve within the share of Rs 500 banknotes, it had mentioned.
In quantity phrases, Rs 10 and Rs 100 banknotes constituted 43.four per cent of the full banknotes in circulation at end-March 2020, RBI had mentioned within the annual report.