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Higher Fuel Prices And Inflation Effect: This Is What RBI Study Says


As per a SBI report, there has been seen a decline in discretionary spending and due to which currency in circulation or CIC has remained primarily rangebound after increasing post demonetisation from Rs 9 lakh crore in January 2017 to Rs 19.5 lakh crore as on September 14 this year. And since then has remained in the range of Rs 19.0-19.6 lakh crore, according to the latest data released by Reserve Bank of India(RBI).

Higher Fuel Prices And Inflation Effect: This Is What RBI Study Says

This is primarily being attributed to fuel price increase because of which people might be cutting down on discretionary spending, primarily in rural areas. So, the decline in CIC is also being owed to the two vicious factors which have been recently hurting the economy hard. Though on the inflation front, India has seen some respite.

Currency in circulation or CIC is the money used by consumers, public and businesses for several of the transactions.

The selling of the dollar from its own forex reserves and in turn withdrawing rupee, is pressuring currency in circulation. Another factor, here in also is the fact that RBI is resorting to exchanging soiled notes which has put an impact CIC.

The demand however is soon going to see a rise ahead of the festive season and harvesting work begins in October.

Read more about: rbi currency
Story first published: Tuesday, September 25, 2018, 15:13 [IST]
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