India's currency in circulation surges to five-year peak, RBI reports

The Reserve Bank of India’s latest State of the Economy report highlights that currency in circulation hit a five-year high, rising 13.5% year-on-year to ₹43.46 trillion by October 15. Reserve money grew 10.3% to ₹53.24 trillion, driven by robust FCNR(B) deposits and RBI liquidity actions such as open-market purchases and swap windows. Since the introduction of a special dollar-rupee forex-swap facility on June 8, banks attracted $133 billion in FCNR(B) deposits through August.

Analysts expect that as the central bank begins to withdraw liquidity, the pace of reserve-money expansion will moderate. The report also notes that India’s economy has withstood global shocks, with strong external sector performance and continued domestic demand supporting growth.