RBI Governor breaks silence on Withdrawal of ₹2000 notes, says move will have very marginal impact on economy

New Delhi (India), 22nd May 2023: On Monday RBI Governor Shaktikanta Das stated that the majority of the withdrawn 2,000 rupee notes are expected to be returned by the September 30 deadline.

Das, speaking to reporters for the first time since the surprise withdrawal of the highest denomination currency note, said the action was part of currency management.

He noted that 2,000 currency notes are still legal tender. According to him, the Indian currency management system is highly resilient, and the exchange rate has stayed stable despite the financial market crisis caused by the war in Ukraine and the failure of certain institutions in the West.

The removal will have a “very very marginal” impact on the economy, he added, adding that 2,000 currency notes accounted for only 10.8% of total cash in circulation.

He explained that the 2,000 notes were created largely to replenish the currency that had been withdrawn following the 2016 demonetisation.

While the withdrawn 2,000 notes can be placed in bank accounts or exchanged for other currencies, banks have been instructed to make required exchange arrangements, he said.

Mr Das also noted that, “We expect the majority of the 2,000 banknotes to be returned to the exchequer by September 30.”