Post Monetary Policy briefing LIVE: Nearly half of withdrawn ₹2,000 banknotes returned, says Das

1. MPC, decides to keep repo rate unchanged at 6.5%. To remain focussed on withdrawal of accommodation of policy stance.

2. Retail inflation projection lowered to 5.1% from an earlier estimate of 5.2%. Headline inflation is still above the 4% target and is likely to remain so during the rest of the year.

3. Net inflow in non-resident deposits at USD 8 billion in FY'23, was USD 3.2 billion last year

4. Real GDP growth projection for FY23/24 is 6.5%.

RBI not thinking of withdrawing ₹500 notes, or re-introducing notes in ₹1,000 denomination; request public not to speculate: RBI Guv

₹1.80 lakh cr of ₹2,000 notes, representing nearly half of the outstanding notes in the withdrawn denomination, have returned back: RBI Guv

“As of March 31, 2023, 3.62 lk cr notes were in circulation. So fat, 1.8 lk cr ₹2000 notes have come back post announcement,” said RBI Guv in post monetary policy press conference. “This is on the expected lines. There hasn't been any rush in banks either.”

Ranen Banerjee, Partner, Economic Advisory Services, PwC India

The MPC expectedly continued with the rate pause as the inflation prints have come well within the tolerance band of 2 to 6% and growth concerns persist. The stance has been kept as withdrawal of accommodation as that is the signalling the RBI wants for keeping the inflationary expectations anchored. The FY24 growth rate projection of 6.5% is more on the optimistic spectrum band as the number of downside risks listed are quite a many. The projected growth rate for Q1 at 8% in FY24 is likely to get tested despite the holding up of demand in the first two months of the year.

"It has now been decided to permit the issuance of RuPay Prepaid Forex cards by banks. This will expand the payment options for Indians travelling abroad. Further, RuPay cards will be enabled for issuance in foreign jurisdictions," governor Shaktikanta Das said.

RBI MPC meet | Top 5 points

1. Monetary Policy Committee, or MPC, decides unanimously to keep repo rate unchanged at 6.5%. MPC to remain focussed on withdrawal of accommodation of policy stance.

2. Retail inflation projection lowered to 5.1% from earlier estimate of 5.2%. Headline inflation is still above 4% target and is likely to remain so during rest of the year.

3. Domestic demand condition remains supportive of growth.

4. Real GDP growth projection for FY23/24 is 6.5%.

Quarterly projection is as follows - Q1 is 8%, Q2 is 6.5%, Q3 is 6% and Q4 is 5.7%.

5. Net inflow in non-resident deposits at USD 8 billion in FY'23, was USD 3.2 billion last year.  You must see our detailed report

Sakshi Gupta, principal economist, HDFC Bank, Gurugram

"The central bank could keep rates unchanged through the year with the chance of any rate cuts in FY24 seeming slim for now."

"We expect both growth and inflation to be lower than the RBI's estimates — growth at 6% and inflation to average at 4.8%-5% in FY24."

"The policy decision does little to move the needle in the bond market as it was broadly in line with expectations."

Sujan Hajra, chief economist and executive director, Anand Rathi shares and stock brokers, Mumbai

"In the wake of a greater-than-anticipated decline in inflation in the recent past, it was anticipated that the monetary policy would shift from a liquidity withdrawal to a neutral stance. However, the MPC has decided to maintain the current stance by a majority vote. This is due to the fact that the demonetisation of Rs. 2,000 banknotes has significantly contributed to the recent increase in liquidity."

"RBI's projections indicate that its inflation target of 4% will be exceeded each month of the current fiscal year. While the continuation of the RBI's policy stance is somewhat disappointing, the central bank's cautious approach in light of upside risks, such as the potential impact of El Nino on India's monsoon and the continuation of monetary tightening by the world's major central banks, appears justified and well-articulated."

"Therefore, we anticipate that the monetary policy announcement will have no effect on the financial markets."

V K Vijayakumar, chief investment strategist, Geojit financial services ltd, Kerala

"Even though the MPC's rate decision and stance have come on expected lines as pause and withdrawal of accommodation respectively, the Governor's commentary can be interpreted as positive."

"The central bank's projection of FY24 CPI inflation has come at 5.1%, lower than 5.2% projected in the previous meeting. This indicates that the MPC has come to the end of this rate hiking cycle."

"If the monsoon is normal and the global scenario is favourable, the MPC may think about a rate cut by end CY2023 or early 2024. From the stock market perspective, this is positive."

E-rupee is, in fact, a currency in digital form, whereas UPI is a platform that facilitates banking transactions. The CBDC will not have an intermediate. You should read in detail

Governor Shaktikanta Das said that RBI's MPC has advocated expanding the scope and reach of e-rupee vouchers to PPIs, as well as authorising the issue of e-rupee vouchers on behalf of individuals.

According to him, this would increase the prevalence of digital payments in the country.

MPC keeps repo rate unchanged at 6.5%; FY24 GDP growth forecast retained at 6.5%

The rupee hardly moved as the Reserve Bank of India maintained its monetary stance and held the benchmark policy rate at 6.5%, as predicted. The rupee was trading at 82.5850 to the dollar, up from 82.5950 previous to the policy announcement.

Steady as it goes: RBI presses pause on repo rate hike, keeps it at 6.5% Read our full report

Repo rate, inflation and GDP: What did RBI's Monetary Policy Committee say today Read here

Sensex gained 144 points to trade at 63,287; Nifty in green at 18,770

MPC decides to keep repo rate unchanged at 6.5%, Standing Deposit Facility Rate remains at 6.25%. Marginal Standing Facility Rate and Bank Rate unchanged at 6.75%: Governor Shaktikanta Das

Going forward, RBI will remain nimble in its liquidity management while ensuring ample availability to meet production needs of the economy: Das

Forex reserves are at comfortable levels, says RBI Governor adding that stood at at $595.1 billion as on June 2.

Goal is to reach the targeted 4% inflation going forward, our monetary policy actions are yielding desired results giving us space to keep rates unchanged in this meeting: Das

FY24 5.1% (Projection) 5.2% (Earlier)

Q1FY24 4.6% (Projection) 5.1% (Earlier)

Q2FY24 5.2% (Projection) 5.4% (Earlier)

Q3FY24 5.4% (Projection) 5.4% (Earlier)

Q4FY24 5.2% (Projection) 5.2% (Earlier)

Average system liquidity is in surplus mode and could increase as ₹2k notes get deposited in banks: Das   

ALSO READ: About 80% choose to deposit Rs2000 notes instead of exchanging: Report

RBI growth outlook

FY24       6.5% (Projection)      6.5% (Earlier)

Q1FY24  8% (Projection)       7.8% (Earlier)

Q2FY24  6.5% (Projection)     6.2% (Earlier)

Q3FY24  6%   (Projection)     6.1% (Earlier)

Q4FY24  5.7% (Projection)     5.9% (Earlier)

Headline inflation is above the target of 4 per cent and expected to remain so during rest of the year: RBI Governor