Last week, ISRI heard from members trading materials with Indian scrap markets that the Indian Ministry of Finance has canceled the legal status of high denomination Rs. 500 and Rs. 1000 bank notes.
A press release issued by
the Ministry of Finance reads in part:
“With a view to curbing financing of
terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of
such funds for subversive activities such as espionage, smuggling of arms,
drugs and other contrabands into India, and for eliminating Black Money which
casts a long shadow of parallel economy on our real economy, it has
been decided to cancel the legal tender character of the High Denomination bank
notes of Rs.500 and Rs.1000 denominations issued by RBI till now. This will
take effect from the expiry of the 8th November, 2016.”
A number of ISRI members have expressed the view that the
move would indirectly strengthen the Indian Rupee in international currency
markets and curb inflation to protect the poor. What this means to U.S.
exporters is that decreased liquidity may push smaller vendors out of the
market whether temporarily or permanently. However, in the long term, Indian
purchasers may have increased buying power to consume scrap commodities.
Additionally, the move may bring increased security and transparency in
payment transactions with Indian vendors.
will continue to monitor the situation and inform the membership as new
information becomes available. Please go to ISRI’s video archive to view a copy of the recent webinar
“Fastest Growing Scrap Export Markets” to hear Joe Pickard’s assessment of this
situation. Feel free to contact Joe Pickard with any questions.