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For international readers: Rs 500 and Rs 1000 are the highest denominations notes in India. Other available denominations are Rs 100, 50, 20, 10. This is such a
by h43k3r 10y ago
For international readers:
Rs 500 and Rs 1000 are the highest denominations notes in India. Other available denominations are Rs 100, 50, 20, 10.
This is such a major move to curb black money in the history of Indian Politics and Economy
- uiri 10y ago1 USD is ~Rs 66. That is a staggering difference in purchasing power! I would guess that the only note in the US with a similar reputation which is still issued would be the $100. Notes larger than this ($500, $1000, $5000, and $10 000) have been discontinued since 1946 and actively destroyed by the Federal Reserve since 1969. Isn't there a concern that those who were using these high denomination notes just switching to other currencies? Bhutan has a currency that is pegged 1:1 with the Indian Rupee and will (presumably) still issue Rs 500 and Rs 1000 notes. Sri Lanka is another possible candidate; and of course there are the standard global reserve currencies - the US dollar and the Euro - whose notes worth over Rs 1000 are relatively common place.
- drl42 10y agoThey are introducing new Rs 500 and Rs 2000 notes and they are going to control the circulation of these new notes
- somethingsright 10y agoThe circulation of new notes will have to be controlled because there will be a limited notes in circulation for some time. The distribution problem has to be solved to ensure everybody have enough notes for daily activities. It would be interesting to see how the notes make it to all the bank branches and ATMs in the next two days and beyond. ATMs are unavailable for 2 days, bank branches for 1 day.
- sandGorgon 10y agoThe consumption market is India. The terrorism target and hawala money laundering targets are India. You destroy the market...the support structure will fall in line.
- Scirra_Tom 10y ago> 1 USD is ~Rs 66. That is a staggering difference in purchasing power! How on earth do you derive purchasing power from comparison of arbitrary units? ~Rs 1 does not have the purchasing power of 1 USD,. 1 Zimbabwean dollar does not have the purcahsing power of 1 GBP.
- slg 10y agoThe grandparent comment wasn't comparing arbitrary units, they were comparing the units of each country's currency denominations. The largest active legal tender in the US is worth $100 while the largest in India was worth $15 (now will be $30). I think it is a fair assumption that those numbers aren't arbitrary and that some thought went into choosing those denominations. That gives you insight into the economies of each country.
- Scirra_Tom 10y agoLargest banknote in UK is £50, largest in EU is €500. That does not imply a staggering difference in purchasing power between £ and €.
- 1024core 10y agoI guess what the OP meant was that the difference in what the highest note can buy is staggering.
- deleted 10y ago[deleted]
- Scirra_Tom 10y agoWhich is meaningless
- 1024core 10y agoIt's just an observation that someone finds mildly interesting. Attaching "meaning" to it, on the other hand, is meaningless.
- cosmie 10y agoSince the current Rs 500 and Rs 1000 notes themselves are no longer considered valid legal tender, they'd have to be exchanged for legal tender before they can be exchanged for foreign currency, even the Bhutan ngultrum (it's pegged to the Indian rupee, but that's irrelevant if the Rs 500 and Rs 1000 notes aren't legal tender representing rupees anymore). This exchange process from no-longer-legal-tender to legal tender is what provides the government visibility (and taxability) into any currently hoarded cash pile. You're correct that future hoarding can be done in a foreign currency where the same maneuver can't be pulled off again, but that doesn't provide an escape from disclosing currently-hoarded cash piles. It's also not nearly as easy to hoard large amounts of foreign currency undetected, since large transactions would be visible via the regulated institution that does the exchange (either when converting local -> foreign or foreign -> local)
- 0x0 10y ago"Purchasing power" does not mean "value of banknotes per kilogram", nor does it mean "value per unit of currency"
- maverick_iceman 10y agoA better comparison would be on the basis of PPP instead of nominal value. Given that India's nominal and PPP GDP are $2B and $8B respectively, $1 ~ Rs.15 PPP.
- josu 10y agoJust to add to your comment, the highest denomination note in India is worth just $1.5USD. According to the Global Findex by the World Bank [1] 47% of the Indian population doesn't have a bank account. And only 22% of the population have debit cards. I don't know, this seems too extreme to me. Certainly 500 euro notes or 100 dollar bills are very useful in dark markets, but the Rs 1000 note was just worth $15USD. This may end up being just a temporary recall and they will reissue 500/1000 notes in a couple of years. [1] http://datatopics.worldbank.org/financialinclusion/country/india http://datatopics.worldbank.org/financialinclusion/country/i...
- amzpix 10y agoThe highest denomination note of INR 1,000 is worth about USD 15.
- tgokh 10y agoAnd they'll be introducing a new Rs. 2000 note, worth about $30
- Retric 10y ago> "but the Rs 1000 note was just worth $15USD" So, I think he agrees with you and is just pointing out without the 500 or 1000 note's the 100 is only worth $1.5USD.
- 7Z7 10y agoMaybe I'm misunderstanding, but there is no "without". The new Rs 500 and Rs 2000 notes will cover the difference.
- Retric 10y agoThe new bills have yet to hit the streets, and the old bills don't count as long term stores of value. So, for a little while India is arguably 'without' Rs 500 and Rs 2000 notes. Basically, they are no longer bills but checks with expiration dates.