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The Withdrawal of Rupees 2000 Notes: A New Mini-Demonetisation in India Soon

In a sudden though not unexpected move, currency notes of the denomination Rs 2,000 are being withdrawn from circulation. This is announced via a notification released by the Reserve Bank of India and not the government (as at the time of demonetisation). These notes are not being withdrawn from circulation, but actually, they will stop circulating right away given that they will have to be deposited in a bank or exchanged for lower denomination notes.

Depreciation of the Rupee vis-a-vis Dollar

There is much fretting about the depreciation of the rupee vis-à-vis the dollar. It is commonplace to equate a strong currency with a strong economy. But that is not true, especially in an emerging economy. Rupee depreciation is nothing to worry about as long as there isn’t too much volatility and sufficient foreign exchange reserves.