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India says adequate currency supply after shortage reports

Published: Updated:

India’s finance minister tried to allay fears Tuesday after media reports of shortages at ATMs across several states sparked memories of the chaotic scenes two years ago sparked by the government’s shock demonetization move.

Local media reported from a string of central, eastern and southern states showing people queuing up at empty ATMs or complaining about a lack of notes.

“Have reviewed the currency situation in the country. Over all there is more than adequate currency in circulation and also available with the banks,” finance minister Arun Jaitley said on Twitter.

“The temporary shortage caused by ‘sudden and unusual increase’ in some areas is being tackled quickly,” he added, without elaborating on what might have caused the sudden increase in demand for notes.

The reports of cash shortages come at a sensitive time for the government of Prime Minister Narendra Modi with the annual harvest season and a crunch local election in southern Karnataka state coming up.

The country last saw such shortages in wake of Modi’s shock decision to withdraw almost 86 percent of the cash in circulation with a single order in Nov. 2016.

The move was a bid to clamp down on corruption and wipe out illicit or untaxed wealth, a move that had significant popular support.

But Indians were also forced to queue for hours to exchange their suddenly worthless bills with the poor struggling to buy daily essentials.