The growth in currency in circulation decelerated to 3.7 per cent for the week ended February 9 from 8.2 per cent a year ago, reflecting the impact of the Reserve Bank of India (RBI)’s decision to withdraw Rs 2,000 banknotes. Currency in circulation (CiC) refers to notes and coins in circulation, while currency with the public comprises notes and coins in circulation minus cash with banks.According to the RBI, commercial banks have reported double-digit growth in deposits in January, which too can be attributed to the withdrawal of Rs 2,000 currency notes. The growth of Reserve Money (RM), as per the RBI data, decelerated to 5.8 percent as of February 9, 2024, from 11.2 percent a year ago (8.8 percent adjusted for the first-round impact of the change in Cash Reserve Ratio (CRR).
Components of RM include CiC, banks’ deposits in RBI, and other deposits with the central bank. The growth in CiC, the largest component of RM, decelerated to 3.7 percent from 8.2 percent a year ago, reflecting the withdrawal of Rs 2,000 banknotes, according to the RBI.