India’s government has introduced a new Rs100,000 note to mark its 30th anniversary, which will replace its existing Rs 500,000 notes.
The new Rs500,000, which is currently accepted in the country’s banks, has already been withdrawn.
It will be replaced by the Rs1,000 denomination of the government’s new government-issued bonds.
The government said it would begin rolling out the new notes to all households on December 1, which was the date of the demonetisation move in November last year.
It also said it planned to roll out new notes in January, with the central bank expected to issue more than 2,000 lakh new notes a month.
The move comes after a month of uncertainty in the currency market, which saw investors withdraw cash from banks and exchanges and freeze their holdings of other currencies, including the rupee and euro.
A year ago, the Reserve Bank of India (RBI) cut the exchange rate for Indian rupees to 7.1 per cent from the previous rate of 9.5 per cent, which affected both consumers and businesses.
The RBI’s announcement that it would allow withdrawals of cash from financial institutions and businesses in exchange for cash, in a move that has triggered widespread speculation in the market, was widely seen as the first step towards demonetising the currency.
India’s Reserve Bank also cut the interest rate on its new Rs1 lakh bond to 3.5% from 6.5%.
In the first two months of 2017, the RBI slashed the interest rates on the government bonds to 7 and 8% respectively.