New Delhi: With 84 per cent of India’s currency notes now out of circulation, traders will face severe hardship in the short run till such time the demand and supply gap in floating cash is bridged, experts said on Wednesday — a day after the Union government demonetised high value currency notes, reports IANS.
“Since the decision has hit public domain all of a sudden, as a short-term impact of demonetisation, there is certainly a turmoil across markets in the country,” Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT) told IANS.
“We also expect a capital liquidity crunch in the markets until the demand and supply gap is met. This will happen once the Rs 2,000 notes are in circulation, and people start exchanging their old Rs 500 and Rs 1,000 notes, or get money credited to their accounts,” he said.
According to Reserve Bank of India (RBI) data, the total value of currency in circulation in the country is Rs 17,54,000 crore. Out of this, Rs 500 notes account for 45 per cent and Rs 1,000 notes account for 39 per cent.”The wholesellers in the markets are refusing to accept any Rs 500-Rs 1,000 notes today. Small sellers like us are facing problems as there is a shortage of Rs 100 and smaller denomination currency notes,” Rajendra Jha, a salesman at Delhi’s Sadar Bazar, told IANS.”There will be some difficulties in our transactions for a month or two. We hope the government comes up with a solution soon,” he added.
Reactions in the local markets were mixed. Most of the vendors were unaware of the development and willingly accepted the old Rs 500 notes in exchange for vegetables. However, the vendors who were aware of the reform, refused to take the higher denomination notes. “Our suppliers have refused to accept Rs 500 notes. I have bought my stock on credit,” Naresh, a local vegetables seller, told IANS.