Washington, Dec 15: The International Monetary Fund (IMF) on Friday said that it has observed benefits in the medium-term from the demonetisation exercise which India carried out in November 2016. According to the report, IMF also said there are potential benefits which are moving forward. Also Read - Boost to India's Air Power: 3 More Rafale Fighter Jets to Arrive in Ambala on November 5

William Murray of the IMF in a news conference however admitted that the move caused temporary disruptions but the effects are dissipating. Also Read - Save Bihar From 'Jungle Raj': PM Modi Slams Lalu's RJD at Darbhanga Rally

“We see salutary benefits from the demonetisation that took place a year ago. And there are potential benefits going forward,” William Murray of the IMF told reporters at the fortnightly IMF news conference. Also Read - Don't Forget Masks, Do Gaj Ki Doori: PM Modi Urges Bihar Voters to Ensure Safety

Murray said the demonetisation did cause some temporary disruptions in economic activity, primarily, private consumption and small businesses due to cash shortages.

“(But) the effects are dissipating,” he said in response to a question.

“In the medium term, demonetisation could have possible effects, including through greater formalisation of and the information on economic activities and a more efficient payment system with a greater use of the banking system and digital payments,” Murry said.

The IMF is slated to come out with an update of its projections of India s growth rate along with the rest of the world in January.

The Modi-led Central Government banned all higher denomination notes of Rs 500 and Rs 1000 from November 8 2016. This move was taken by the government reportedly in a bid to check counterfeit currency in the economy and black money. Later the government said it also sought to promote a less-cash economy and digital transactions.

The BJP Government did face flake from opposition for disrupting the lives of citizens, who spent several days under cash crunch. Soon new Rs 500 notes were introduced with another higher denomination note of Rs 2000.

With agency inputs