Withdrawal of Rs 2000 note will benefit the government and companies
[ad_1]
It is mandatory for banks to put a part of deposits in sovereign debt. Due to this, the short tenure government bond yields are showing a decline. A foreign bank official said certificates of deposits are likely to decline by 15 basis points, T-bill yields by 10 basis points and short-term government yields by 5 to 7 basis points. When the government announced demonetisation in 2016, there was a spurt in deposits. RBI has set a deadline of 30 September to deposit or exchange 2000 notes.
There will be no effect on the economy
Meanwhile, the Finance Ministry says that the decision to demonetise the Rs 2,000 note will not affect the money supply or financial transactions. Officials say that the Rs 2000 note came after the demonetisation of 2016 and most of it is no longer in circulation. Finance Secretary TV Somanathan said that it will not have any effect on the economy. Sufficient number of small denomination notes are available in the country. Economic Affairs Secretary Ajay Seth said that there will be no impact on the money supply in the economy.
[ad_2]
Source link
