There are reports that the Reserve Bank of India has stopped printing the Rs 2,000 currency notes altogether and will not be bringing new notes in the current financial year.
What has further fuelled rumours of another round of demonetisation is the government launching Rs 200 note. With more Rs 200 and Rs 500 notes in circulation, the common people will not be impacted much by a ban on the Rs 2,000 note. The ban will be an effective step against black cash as demonetisation of Rs 2,000 currency note will hit hoarders more than the masses.
Rs 2,000 note had an important purpose when it was launched after demonetisation in November 2016. It was meant to ease the shortage of money supply. Now there is no such need.
If the government plans to increase supply of lower denomination notes such as Rs 500 and Rs 200 and restrict supply of Rs 2,000 note, it is quite possible that these steps would lead to demonetisation of Rs 2,000 note.
What has further fuelled rumours of another round of demonetisation is the government launching Rs 200 note. With more Rs 200 and Rs 500 notes in circulation, the common people will not be impacted much by a ban on the Rs 2,000 note. The ban will be an effective step against black cash as demonetisation of Rs 2,000 currency note will hit hoarders more than the masses.
Rs 2,000 note had an important purpose when it was launched after demonetisation in November 2016. It was meant to ease the shortage of money supply. Now there is no such need.
If the government plans to increase supply of lower denomination notes such as Rs 500 and Rs 200 and restrict supply of Rs 2,000 note, it is quite possible that these steps would lead to demonetisation of Rs 2,000 note.
