This happens not only India but other nation also suffered from demonetisation early. Government always said that demonetisation is helpful for nation economical health but the common man suffers a lot. Here we are sharing those countries those suffers from this financial crisis.
Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency: The current form or forms of money is pulled from circulation and retired, often to be replaced with new notes or coins.
During the government of Muhammadu Buhari in 1984, Nigeria introduced the new currency and banned the old notes. However, the debt-ridden and inflation hit country did not take the change well and the economy collapsed.
In 1982, Ghana ditched their 50 cedis note to tackle tax evasion and empty excess liquidity. This made the people of the country support the black market and they started investing in physical assets which obviously made the economy weak.
From December 2016, Pakistan will phase out the old notes as it will bring in new designs. Pakistan legally issued the tender a year and a half back, and therefore, the citizens had time to exchange the old notes and get newly designed notes.
Zimbabwe used to have $100,000,000,000,000 note. Yes, a one hundred trillion dollar note! The Zimbabwean economy went for a toss when President Robert Mugabe issued edicts to ban inflation through laughable value notes. After demonetisation, the value of trillion dollars dropped to $0.5 dollar and was also put up on eBay.
The demonetisation that happened in North Korea in 2010 left people with no food and shelter. Kim-Jong ll introduced a reform that knocked off two zeros from the face value of the old currency in order to banish black market.
This was the first nation to introduce polymer notes. This was done to stop the widespread of counterfeiting. It did not have any side effects on the economy.
Myanmar’s military invalidated around 80% value of money in 1987. This step was taken to curb the black market. Sadly, this decision led to economic disruption and it also leads to mass protests that killed many people.
Dictator Mobutu Sese Seko’s administration laid out back-to-back currency reforms along with a plan to withdraw obsolescent currency from the system in 1993. The reform was not well received by the public and resulted in increasing economic disruptions. Mobutu was ousted in 1997.
Under the leadership of Mikhail Gorbachev in January 1991, the erstwhile Soviet Union withdrew 50 and 100 ruble notes, in order to eliminate black money and increase the currency value. The notes accounted for a third of the total money in circulation.
Gorbachev faced a coup within eight months in August as the move was not a success. The 1991 attempt led to a successful re-denomination of the ruble in 1998 where three zeros were removed. This was followed by another currency switch in 2010 when two more zeros were removed from the old currency. The 2010 attempt was not as successful as the timing coincided with a poor harvest.
On ‘8 November 2016’, the Government of India announced the demonetisation, commonly called notebandi, of all ₹500 (US$7.80) and ₹1,000 (US$16) banknotes of the Mahatma Gandhi Series. The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism.