Demonetization is an act
with the intention of economic growth. The high denominated notes printed by
RBI Rs 10,000 note was demonetized in January 1964 and again in January 1978. The
Govt of India announce the demonetization of all ? 500 and
? 1000 bank notes on 8th November 2016. Therefore, many
parties are interested to know the movement of various currencies price and
commodity price after demonetization. Hence this study is an attempt to know
the changes of foreign exchange market and Indian commodity market because of
The purpose of this study
is to help the investors by providing detailed information about the effect of
demonetization period. Result of these study helps the investors to take
required investment decision.
Demonetization at a
has been a historic movement with short term effort and long-term benefit. Demonetization
is necessary whenever there is need to change national currency. The Govt of
India announce the demonetization of all
? 500 and ? 1000 bank notes On 8th
November 2016. Around 97% of demonetized amount has been deposited in to banks
i,e. Rs 14.97 trillion ($220 billion)out of Rs 15.4 trillion as on Dec 30,2016.
The govt claimed that the demonetization of higher denomination currency is to
curb financing of terrorism through the fake currency notes and use of such
proceeds to finance prohibited activities such as smuggling of arms, terrorist
activities etc. But limitation was placed on cash withdrawals and exchanging.
Also new denomination notes, 2000 and Rs 500 were introduced by Reserve Bank of
et.al.,(2017) Examine whether the share price reacts to
the demonetization announcement. The demonetization announcement made in the
year 2016 by the govt of India. The population of this study includes all the
listed index companies of banking and automobile sector for event study
analysis. During the study period, the demonetization announcement does not
have any impact.
and Ms.Smitha v Shenoy (2017) attempts to explore the
impact of demonetization on stocks of selected sector through an event study.
This descriptive nature study done by
the sample of five companies from five industries listed in BSE. The study
proved that the demonetization has not affected the stock market to an extent
that investors expected.
and Anu K.M (2017)
Examine the impact of demonetization on India stock market, with special
reference to sectoral indices in National stock exchange of India. Closing
index for the period from October 3rd to December 9 2016 used for
the event study which contain 47 observations. Result of the study support that
demonetization announcement has a significant impact on the stock market for
the Indian economy.
Kumar (2017) Examined the effect of demonetization on
stocks in terms of EPS. The author has compared the EPS of companies before and
after demonetization and estimated the EPS for next quarter i.e. January to
march to analyse the long term impact of demonetization and has given an
opinion that there is no negative impact of demonetization in the long term.