Currency with public (CWP) is likely to increase to Rs 16 lakh crore by March-end driven by the upcoming festival season and the kharif harvest, a study said.
Money supply (M3) growth slowed to 7.3 per cent in 2016- 17, from double digit levels in the previous three years, led by the sharp year-on-year (YoY) contraction in currency with the public (CWP) after demonetisation, the impact of which was offset by the surge in demand and time deposits with banks, Icra said in a report.
During 2017-18 so far, CWP witnessed a sharp increase in the first quarter, rising to Rs 14.7 lakh crore as on July 7, 2017 from Rs 12.6 lakh crore as on March 31, 2017, primarily reflecting continued remonetisation, and to a smaller extent, the impact of the front-loading of spending by the government, it said.
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Subsequently, CWP has witnessed a mild rise of Rs 0.1 lakh crore from July 7, 2017 to September 1, 2017, indicating that latent currency demand has stabilised and the process of remonetisation is complete.
Icra expects CWP to rise to Rs 16 lakh crore by end of the financial year 2017-18, registering a year on year rise of 27 per cent.
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