The pandemic has triggered a ‘dash to cash’ with many households hoarding bank notes. This has resulted in the currency to GDP ratio increasing to pre-demonetisation levels of 12% in 2019-20. Since March 20, currency in circulation has risen to 26.9 lakh crore—a hike of 10% since the lockdown began. At the same time, the number of Rs 2000 notes in circulation has dipped sharply in two years. The increase in currency is taking place at a time when digital payment transactions are hitting a new high every month.
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