Mumbai, Aug 2 - The Reserve Bank of India (RBI) on Wednesday said that the currency in circulation was showing signs of reaching normal levels after the note ban on November 8 last year. "The currency in circulation is showing early signs of normalisation. We are continuously in touch with the government to make the task complete," RBI Deputy Governor Viral Acharya said during a press briefing after the central bank's monetary policy review.
The economy is now close to complete remonetisation as the new currency in circulation reached 84% of the extinguished one on July 7, a State Bank of India Ecowrap report stated earlier. The total amount of the spiked high value denomination notes of Rs 500 and Rs 1,000 in circulation on November 8 was Rs 15.44 lakh crore.
Acharya said the Reserve Bank is closely monitoring the money in circulation for the system to reach stable levels.
"We were clearly remonetising. We had to wait and assess when the system was reaching stable currency in circulation. Only recently this has started happening. Else the currency in circulation was just going up," he said.
"We had to give certain amount of time if the system is getting the currency that it requires. We have restarted market operations. We have been mopping up lot of liquidity at a gradual pace. The intent is not to shock the market in any way," he added.
Acharya said the bank will monitor to give a reasonable growth in currency demand over the next 6-9-12 months that will lead to more durable liquidity operations.