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Currency in circulation rises 22% in May over pre-demonetisation level

NEW DELHI: Currency notes in circulation stood at Rs 21.71 lakh crore as of May end 2019, showing an increase of more than 22% over the pre-demonetisation level, finance minister Nirmala Sitharaman told the Rajya Sabha on Tuesday.

The notes in circulation as on November 4, 2016 were Rs 17,74,187 crore, which have now increased to Rs 21,71,385 crore as on May 31, 2019,Sitharaman said in a written reply to a query.

The government had announced demonetisation of Rs 500 and Rs 1,000 notes on November 8, 2016.

Sitharaman said the notes in circulation had grown at an average growth rate of 14.51% year on year wise since October 2014.

The demonetisation, the minister said, was done with a view to eliminate black money, curb fake currency and thereby to create deterrence to funding of terror and left-wing extremism, facilitate transition of India's non-formal economy into a formal economy, and to give boost to digitalisation, among other objectives.

As reported by the Reserve Bank of India, 762,072 pieces of counterfeit bank notes were detected in the banking system during 2016-17; 522,783 pieces in 2017-18; and 317,389 pieces in 2018-19, Sitharaman said. Hence, demonetisation resulted in curbing of the counterfeit currency, she said.

The minister further said a significant growth has been observed in digital transactions in the country post demonetisation. Growth of digital transactions in terms of value has increased to Rs 188.07 lakh crore in September 2018 from Rs 112.27 lakh crore in November 2016.

KEEPING TAB ON RUPEE VALUE

The minister said the government and the Reserve Bank are closely monitoring the rupee exchange rate against the dollar on an ongoing basis.

The rupee has depreciated from Rs 60.50 to a dollar in 2013-14 to Rs 69.74 to a dollar in April-December of 2018-19, the minister said in a written reply to the Rajya Sabha.

The government and RBI are closely monitoring the emerging external position, including exchange rate of the rupee on an ongoing basis, and are calibrating policies or regulations to support robust macroeconomic outcome, she said.