International Monetary Fund supports India's demonetisation, but calls for prudent handling

The IMF on Friday said it supports India's efforts to fight corruption through demonetisation, but noted that the transition needs to be managed 'prudently' to minimise any disruption.

"We support the measures to fight corruption and illicit financial flows in India. Of course, given the large role of cash in every day transaction in India's economy the currency transition would have to be managed prudently to minimise possible disruption," the International Monetary Fund (IMF) spokesman Gerry Rice said in a news conference.

He was asked to comment on the Indian government's decision to withdraw Rs 500 and Rs 1,000 currency notes from circulation. "I am just saying that when countries make these kinds  of move, which is not exceptional - countries do this quite often- the transition needs to be managed very well," Rice said inresponse to another question.