The RBI’s response to the government was: That the economic growth referred to by the government was real while the rise in currency was nominal and not adjusted for inflation and ‘hence this argument does not adequately support the recommendation’ for demonetisation. That most black money was held as land or gold and not cash, and abolishing currency would have no effect on curbing black money. That demonetisation would have a negative impact on GDP. That Rs 400 crore in counterfeit currency was insignificant (only 0.02 per cent) compared to the total cash in circulation, which was Rs 18 lakh
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