How much cash can a person carry in India?

Residents of India are allowed to carry up to Rs. 25,000 though. There’s no limit, however, to how much foreign currency you can bring into India. Although, you will have to declare it if the amount exceeds US$5,000 in notes and coins, or US$10,000 in notes, coins and traveller’s cheques.

What is meant by demonetization what is its impact on the money supply of the country?

Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change in national currency. The current form or forms of money is pulled from circulation and retired, often to be replaced with new notes or coins.

Can we carry cash in flight?

The Government of India has passed guidelines not to carry cash more than 2 lakhs in general. It will be illegal to carry cash . Even carrying cash in flight it is taxable. So we can carry cash up to 2lakhs in domestic flights in India.

When did the government Demonetize the 500 and 1000 rupee notes?

8 November 2016
On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series.

How much money came back to RBI after demonetization?

According to the RBI data, almost the entire chunk of money (more than 99 per cent) that was invalidated came to the banking system. Of the Rs 15.41 lakh crore worth invalidated notes, notes worth Rs 15.31 lakh crore have returned.

What is the new equilibrium of the Indian rupee?

The new equilibrium is now at E3, where exchange rate is Rs.65 for $1. This may happen when exports rise and sellers from abroad need to pay Indian exporters in Rupee terms. To do so they must supply more foreign ex­change to Indian banks in return for Rupees.

What happens when the supply of dollars increase in India?

An increase in supply of dollars is shown as a rightward shift of supply curve from SI to S2. The new equilibrium is now at E3, where exchange rate is Rs.65 for $1. This may happen when exports rise and sellers from abroad need to pay Indian exporters in Rupee terms.

How much is 1 rupee worth in dollars?

The answer lies in understanding that for every Re now we get fewer dollars. Earlier we got 1/70 = 0.014286 dollars per Re. In the new equilibrium we end up with 1/75 = 0.01333 dollars per Rupee. Since we end up with lesser dollars this is depreciation of the Rupee.

Why is foreign exchange demanded in India?

Foreign exchange is demanded when residents of India (in terms of in­dividuals or private companies) and government want to spend in terms of foreign currency, instead of Rupees. If a non-resident provides any service, she must be paid dollars by the Indian employer, which adds to demand for dollars.