Economic activities are stabilizing post demonetization
Posted on: 28/Jan/2017 5:28:44 PM
After demonetization in India, the currency flow is slowly catching up. As per the present supply, Nomura, a Japanese financial services major says by end of March this year, the ratio of currency vs GDP will be 9 percent which will be enough for stabilizing economic activities.
This was 11.8 percent on 4th November. Following demonetization, the flow had dropped to 5.9 percent as of 6th January. Starting from 20th January, the circulation of currency within India started raising to 6.5 percent.
Hence, there is significant progress of remonetization. The Reserve Bank of India has started printing new notes and stopped accepting old notes from the public. By end of March this year, the currency to GDP ratio will increase to 9 percent. This will help in stabilizing activity as few parts that were hoarded and because of digital footprint, according to Nomura.
Nomura had an earlier view of negative aspect of demonetization which is now amended. It now says the economy would be of a V shape in recovering during second half of 2017.
