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The sequel to demonetisation India is here again!The whole process is decrypted, what do we think?
Hey, military fans, today let's talk about a topic that can be called the best in finance and international relations!Aren't you a little curious about why India has started to scrap demoneties again?Don't worry, I'll reveal the whole process to you.
First of all, let's travel back in time and space to 2016, when Indian Prime Minister Narendra Modi suddenly announced the abolition of the 500 and 1000 rupee banknotes, and the whole country was boiling. This so-called "financial blitzkrieg" has been touted by Modi as part of a clean-up and deepening reform, but in reality, the impact on India's economy is not small. In particular, the informal sector, such as small and medium-sized enterprises and individual businesses, has been hit hard.
However, in the blink of an eye, in 2023, the Reserve Bank of India (RBI) announced the cancellation of the 2,000 rupee note. This can't help but make people want to ask, why does this guy always love to do this?It turned out that the Reserve Bank said that the target of introducing the 2,000 rupee denomination had already been achieved, so it simply withdrew. This scene reminds me of the demonetization scandal and its long-term impact on the Indian economy.
In 2016, Prime Minister Narendra Modi made a bold move to break the grip of corruption and black money, while pushing India towards a "cashless economy". Let's look at the then Governor of the Reserve Bank of India, who tirelessly called for the use of debit cards and digital wallets, saying that it would allow India to leapfrog into an economy with less use of cash. It seems that demonetization is not only about rectifying the economy, but also about "guiding".
The market capitalization of the Indian rupee fell from Rs 179.7 billion in November 2016 to Rs 7.8 billion in January 2017 after demonetisation. Wow, this is a brilliant show of demonetisation!You see, this kind of number is really shocking.
Don't think this is only happening in India. The European Central Bank also stopped issuing 500 euro notes in 2016 in an effort to combat drug trafficking, money laundering and terrorist financing. Not to be outdone, Singapore stopped issuing S$10,000 notes in 2010 to combat money laundering. We can curiously imagine what the outcome would be if other countries also came up with several rounds of demonetization actions, for those countries with high levels of corruption
Overall, India's demonetization campaign appears to be aimed at cleaning up the economy and fighting corruption, but in fact it has raised a series of problems. Will these demonetisations save the economy or make matters worse?Message area, listen to what you think of this demonetization drama.