The Reserve Bank of India has announced that its highest-value note – the 2,000 rupee banknote (worth around $24) – will no longer be legal tender after 30 September.
This, according to IDEX Online, “is expected to fuel a consumer spending frenzy in India on diamonds, gold and other luxuries,” according to IDEX Online.
The explanation, according to economists, is that although the 2,000 rupee notes can be deposited or exchanged, “many people will be wary that the tax authorities will be alerted to their undeclared income,” so those with a stash have started “spending it instead, prompting a short-term in prices of gold, in particular.”
The 2,000 rupee note was only introduced in 2017, to replace 500 and 1,000 rupee notes.
