Currency in circulation expands 22% in 2020 amid Covid-19 pandemic

The currency in circulation (CIC) expanded by 22.1 per cent in calendar year 2020, as people hoarded cash at a time when the nation went into a lockdown and uncertainty prevailed over how liquidity needs would be met. 

Data released by the Reserve Bank of India showed that in calendar year 2020, the currency in circulation growth was way higher than 2019’s 11.8 per cent growth rate. The growth in CIC is not surprising, considering that in the first four month of the calendar, incremental CIC was higher than the entire calendar year of 2019. The increase in currency in circulation between January and May 1 was Rs 2.66 trillion. In comparison, it increased by Rs 2.40 trillion in the entire 2019 (January to December). 

The outstanding currency in circulation was Rs 27.7 trillion as on January 1, 2021. In the financial year so far, the CIC has increased by Rs 3.23 trillion.