Demand for currency could rise despite digitisation, says RBI study

Analysts are predicting that the nominal GDP growth rate could be negative in the present financial year, but that doesn't mean that the currency in circulation would fall

Demand for currency rises in a low interest rate environment and falls when the rates are high, a Reserve Bank of India (RBI) staff study has found. The country, therefore, will have to live with higher currency in circulation in the coming days despite higher penetration of digital transactions, it has pointed out.

According to the latest RBI data, for the first time, the value of card and mobile payments of Rs 10.57 trillion was more than ATM withdrawals of Rs 9.12 trillion in the fourth quarter of fiscal 2019-20.

In the months of lockdown, the gap may have widened further as