Currency in circulation may touch around Rs 20.9 trillion by FY19

Based on trend estimates, banknotes in circulation could potentially reach around Rs 20.9 trillion by FY19 (or 11.1 per cent of GDP); it was Rs 20.4 trillion at end-January this year. Had there been no demonetisation, the expected amount at the end of FY19 would have been Rs 22.45 trillion (or 11.9 per cent of GDP). In effect, the currency in circulation (CIC) – the technical term used – is at least Rs 1.5 trillion lower from trend estimates sans demonitisation.

The income velocity (IV) of circulation after showing a spike in the demonetisation period (FY17 velocity:12.1) has again gone back