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RBI Governor Urjit Patel Gave Numbers To Parliamentary Panel That Don't Quite Match The Bank's Own Data: Reports

Leaving economists scratching their heads

20/01/2017 12:44 PM IST | Updated 20/01/2017 4:45 PM IST
Aijaz Rahi/Associated Press

On Wednesday, Reserve Bank of India governor Urjit Patel faced some tough questions from a Parliamentary panel on demonetisation that has thrown the country into cash chaos. While he didn't answer most questions, the only new detail he reportedly gave out was the amount of new currency -- ₹9.2 lakh crores -- that the RBI has released since demonetisation.

But even that figure has economists and analysts scratching their heads as it doesn't quite match the latest data released by the bank on currency in circulation.

According to latest RBI data, as of January 13, currency in circulation was about ₹9.5 lakh crores -- including both new notes and ₹2.53 lakh crores worth of existing non-demonetised notes already in circulation, noted the Times of India. That means only ₹6.97 lakh crores has probably been released in remonetised currency, lower than the ₹9.2 lakh crore figure cited by the governor. At ₹9.2 lakh crore, it was estimated that about 60 per cent of the scrapped currency has been replaced so far.

Additionally, according to an analysis by Bloomberg, it looks like Indians have mysteriously withdrawn about ₹60,000 crore ($9 billion) more than the ₹9.1 trillion of currency in circulation as of Jan 13 as stated in the report that RBI submitted to the parliamentary panel on Wednesday.

These figures have forced economists to guess as to what RBI's data and RBI governor's testimony probably means.

Sonal Verma, chief India economist at Nomura, Singapore told the Times of India, "New notes put in circulation of ₹6.78 lakh crore appears more correct when tallying it with the currency in circulation data. The ₹9.2 lakh crore number appears to refer to something else. If indeed ₹9.2 lakh crore of new notes were issued, then currency in circulation would have risen at a much faster pace, which it has not."

An RBI spokesperson couldn't immediately be reached for comment.

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