Cash Crunch or Seasonal Slide? RBI Reports ₹42.63 Bn Dip in Circulation

India’s currency in circulation (CiC) witnessed a notable contraction of ₹42.63 billion, slipping to ₹38.47 trillion in the week ending June 13, according to the Reserve Bank of India’s latest data. This marks the second consecutive weekly decline, hinting at a possible seasonal adjustment or a shift in liquidity preferences.

 

The drop in CiC—often seen as a proxy for public cash demand—comes amid a broader trend of digital payment adoption and tighter liquidity conditions in the banking system. Analysts suggest the decline could be attributed to postelection cash normalization, reduced ATM withdrawals, or increased deposits following tax deadlines.

 

Interestingly, the fall in physical currency contrasts with the RBI’s steady push toward digital rupee trials and e₹ adoption. The central bank has been gradually expanding its pilot programs for both retail and wholesale digital currency, which may be subtly influencing cash usage patterns.

 

Key Highlights:

While the dip is not alarming, it underscores the RBI’s balancing act between managing liquidity and nudging the economy toward a lesscash future.

 

Sources: Reserve Bank of India, Business Standard, Moneycontrol