RBI Governor delivers Bimonthly Monetary Policy Statement

Source: The post is based on the article “RBI Governor delivers Bimonthly Monetary Policy Statement” published in PIB on 8th December 2022

What is the News?

The Monetary Policy Committee(MPC) of the Reserve Bank of India (RBI) has released its latest review of the monetary policy. 

What are the key highlights from the RBI Monetary Policy Committee(MPC) meeting?

GDP forecast lowered: The MPC lowered the GDP forecast for the financial year 2022-23 to 6.8% from an estimate of 7% earlier. This is due to continued risks emanating from protracted geopolitical tensions, global slowdown and tightening of global financial conditions.

Story of Indian Rupee one of Resilience and Stability: RBI spoke of the appreciation of the US dollar this year which precipitated large-scale depreciation of all major global currencies including the Indian rupee (INR). 

– Through this episode of US dollar appreciation, the rupee’s movements have been the least disruptive, relative to peers. In fact, the INR has appreciated against all other major currencies except a few. Hence, the story of the INR has been one of India’s resilience and stability.

What are the measures announced?

UPI gets Stronger: The capabilities of UPI will be further enhanced by introducing single-block-and-multiple-debits functionality. This facility will enable a customer to block funds in his/her account for specific purposes, which can be debited whenever needed.  

Scope of Bharat Bill Payment System (BBPS) gets Wider: The scope of BBPS is being enhanced to include all categories of payments and collections, both recurring and non-recurring, and for all categories of billers (businesses and individuals). 

– This will make the BBPS platform accessible to a wider set of individuals and businesses who can benefit from the transparent payments experience, giving them faster access to funds and improved efficiency.

Hedging of Gold in the International Financial Services Centre(IFSC): Resident entities in India are currently not permitted to hedge their exposure to gold price risk in overseas markets.