Currency in circulation jumps by Rs 19,699 crore, total kitty hits Rs 22 lakh crore

MUMBAI: The week ended October 4 saw currency in circulation jump to hit Rs 22 lakh crore - an increase of Rs 19,699 crore. The growth in the value of currency notes has crossed Rs 69,077 crore during the current financial year - a rise of 3.2%.
The week before Diwali usually sees a surge in currency in circulation as consumption increases during this period and majority of payments for personal expenditure continues to be in cash. This year, the festivals have also coincided with elections in several states.

The last time currency in circulation had grown higher was in the week ended June 7, 2019, when total currency rose Rs 22,272 crore. There has also been a crisis of confidence in cooperative banks after the fraud in PMC Bank. Despite a sharp increase this week, currency in circulation is still below levels seen between May 17, 2019 and June 14, 2019. The value of notes touched an all-time high of Rs 22,19,853 crore on June 2019 - almost three years after demonetisation.

RBI officials however say that the ratio of currency in circulation to GDP continues to be below what it was before demonetisation (11.6%).

Bankers expect that the use of currency will drop from next year, when toll collection on the highways will move to electronic payments.