RBI Governor Shaktikanta Das on Thursday while interacting with the press said that the Reserve Bank of India has no plans of withdrawing Rs 500 notes or re-introducing Rs 1,000 notes. He requested the public to not give in to rumours or speculations.
While speaking on Rs 2,000 notes he further added, "On provisional basis, about 85 per cent of Rs 2,000 notes are coming back as deposits into bank accounts."
Liquidity management
When Das was delivering his Monetary Policy speech in the morning he had said, "Since the third week of May, however, the decline in currency in circulation and pick-up in government spending have expanded the system liquidity. This has further augmented due to the Reserve Bank's market operations and the deposit of 2,000 banknotes in banks."
Further the RBI said it will remain nimble in its liquidity management, while ensuring that adequate resources are available and ensure the orderly completion of the government's market borrowing programme.
RBI Deputy Governor T Rabi Shankar said that close to Rs 1,80 lakh crore of Rs 2,000 notes which represent nearly half of outstanding notes in the withdrawn denomination have been retired. He also appealed to the citizens not to rush to banks in order to exchange the Rs 2,000 notes as the RBI has given adequate time for the exchange of notes.
He further went on to add that the Liquidity is balancing out. According to the RBI there was a lot of tightness until mid-May, but since then the liquidity has eased.
Repo rate remains unchanged
The RBI on Thursday left its key interest rate unchanged for a second straight policy meeting but signalled that it wants to see inflation moderate more while preserving the growth momentum. The monetary policy committee, which has three members from RBI and an equal number of external experts, voted unanimously to keep the benchmark repurchase, or repo rate unchanged at 6.50 per cent.
Inflation and CPI
It has also lowered India's inflation projection for 2023-24 to 5.1 per cent against its April estimate of 5.2 per cent.
On a quarterly basis, retail inflation (or Consumer Price Index) in Q1 is seen at 4.6 per cent, Q2 at 5.2 per cent, Q3 at 5.4 per cent, and Q4 at 5.2 per cent, RBI Governor Shaktikanta Das said Thursday while reading out the monetary policy statement after a three-day deliberation.
