Mumbai: RBI’s Repo Rate Unchanged and 2000 Rupee Note Withdrawal
Maintaining Repo Rate Stability
In a bid to rein in escalating retail inflation, the Reserve Bank of India (RBI) has made an unaltered decision by keeping the repo rate steady at 6.5 percent for the third consecutive time. This move signifies a steadfast approach towards curbing inflation while concurrently leaving other loan aspects such as monthly installments (EMIs) for mortgages and vehicles unaffected.
2000 Rupee Note Withdrawal Announcement
On another front, a significant development concerning the 2000 rupee note has emerged. The announcement was made that the circulation of the largest denomination note, the 2000 rupee note, will be phased out of circulation. This transition was set into motion on May 19, 2023. Subsequently, a deadline of September 30 has been established for the return of these notes.
— ANI (@ANI) August 10, 2023
RBI’s Insights on 2000 Rupee Note Return
In conjunction with this development, the Reserve Bank of India has disclosed vital information regarding the returned 2000 rupee notes. As of July 31, 2023, an aggregate sum of pink notes valuing Rs 3.14 lakh crore has been reclaimed from circulation. RBI Governor Shaktikanta Das remarked on the situation, highlighting a surplus liquidity scenario attributable to the phased withdrawal of the 2000 rupee notes. Notably, an impressive 87% of the total 2000 rupee notes have been accounted for in the return process.
Data from the RBI indicates that post the May 19, 2023 announcement, 87% of the 2000 rupee notes have been retrieved, collectively amounting to nearly Rs 3.14 lakh crore. This leaves a remaining sum of Rs 0.42 lakh crore still in circulation. A closer examination reveals that in June, the returned 2000 rupee notes amounted to Rs 2.72 lakh crore, while Rs 84 thousand crore worth of notes remained within public possession. Impressively, within the subsequent 30 days, this number has substantially diminished by half.
In the current landscape, approximately Rs 42,000 crore worth of 2000 rupee notes are still in circulation, reflecting the ongoing process of withdrawal and the subsequent impact on the market.
The RBI’s strategic decision to maintain the repo rate and the phased withdrawal of the 2000 rupee note are significant steps that contribute to the country’s financial stability and regulation. As the Indian financial ecosystem adapts to these changes, it remains crucial to stay informed about these evolving economic trends.