The Reserve Bank has ventured into Artificial Intelligence (AI) and Machine Learning (ML) analytics in multiple areas in order to develop cutting-edge systems for high frequency and real-time data monitoring and analysis, RBI Governor Shaktikanta Das said today.

In his address at the inauguration of the RBI’s 18th Statistical Day Conference, Governor Das said: “The focus now is naturally on enhancing capacity in AI and ML techniques and analysing unstructured textual data. While doing so, ethical considerations need to be addressed and biases in algorithms need to be eliminated.”

He said that this annual event provides an opportunity to reflect on the current and evolving state of the statistical system. It also helps to take stock of the refinements in the application of statistical methods and technologies in the realm of public policy.

“Looking ahead, the year 2025 has a special significance for the compilation of official statistics the world over. Global efforts are expected to culminate in new global standards for the compilation of macroeconomic statistics, especially for national accounts and balance of payments. Our team in the Reserve Bank is closely tracking these developments,” the RBI Governor said.

The surge in computing power is being increasingly harnessed in combination with statistical methods to improve efficiency in decision-making and enrich end-user experience in various fields of human knowledge, he added,

The celebration of Statistics Day in India coincides with the birth anniversary of Professor Prasanta Chandra Mahalanobis whose contributions in laying the foundations of modern-day official statistics in India have been pioneering. Inspired by his work, Indian statisticians are making their presence felt – both domestically and globally in traditional as well as in newer applications of statistics, he added.

Governor Das highlighted the areas in which the Reserve Bank’s cutting-edge information management is contributing to the formulation of public policies and the overall economic development in India.

“One year ago, we launched our next-generation data warehouse, i.e., the Centralised Information Management System (CIMS) at the Statistics Day Conference. Several new features were introduced in the new system. Scheduled commercial banks (SCBs), urban co-operative banks (UCBs) and non-banking financial companies (NBFCs) have already been onboarded for reporting on the new portal,” he said.

The new CIMS is also facilitating research on the Indian economy, minimising reporting burden, exploiting the technological advances and improving the experience of both data providers and users, Governor Das added.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Mumbai:

Reserve Bank Governor Shaktikanta Das today said India has been building up gold reserves as part of its forex deployment.

“We are building up gold reserves that is a part of our reserve deployment,” Governor Das told reporters at the customary post-policy review press conference.

He did not give any specifics on the quantum of gold buys, but pointed to the official data which shows an increase in the value of gold reserves.

As per official data, the value of gold in the forex reserves stood at USD 51.487 billion as on March 22, which is USD 6.287 billion higher than the value as at end-March 2023.

As per a recent news report, RBI bought 8.7 tonne of gold in January alone which is the highest in two years.

The central bank’s gold holdings had touched 812.3 tonne at the end of January from 803.58 tonne in the preceding month, as per the World Gold Council. The price of gold has also seen a rally over the last few months.

Earlier in the day, Governor Das announced that the overall forex reserves have touched an all-time high of USD 645.6 billion as of March 29, a breakup of which will be made available on Friday evening with the release of the weekly statistical supplement (WSS).

Speaking to reporters, Governor Das said RBI has consciously focused on building forex reserves over the last four-five years to act as a buffer against any future risks where there are dollar outflows from India.

He also said the central bank’s approach on the forex front adds strength to the national balance sheet as well.

Governor Das also said that having a stable rupee is a priority for the Reserve Bank.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The retail inflation in February was 5.1%, while inflation in the food basket was at 8.66%.

The Reserve Bank of India (RBI) on April 5 said food price uncertainties continue to weigh on the inflation trajectory going forward, even as it retained 4.5% retail inflation projection for the current fiscal.

In its first bi-monthly monetary policy for current fiscal, the RBI said notwithstanding the cut in petrol and diesel prices in mid-March 2024, the recent uptick in crude oil prices needs to be closely monitored.

“Continuing geopolitical tensions also pose upside risk to commodity prices and supply chains,” RBI said. “Assuming a normal monsoon, CPI inflation for 2024-25 is projected at 4.5%,” RBI governor Shaktikanta Das said.

RBI Monetary Policy updates | Policy repo rate unchanged at 6.5%; real GDP growth for FY25 projected at 7%

Although RBI retained the full year inflation projection, it tweaked the forecasts for the quarter. RBI forecast April-June quarter inflation at 4.9% and in September quarter at 3.8%.

For December and March quarters, inflation is projected at 4.6% and 4.7%, respectively. The RBI said that deflation in fuel is likely to deepen in the near term, following the cut in LPG prices in March.

The government last month announced a steep cut of ₹100 in cooking gas LPG prices to ease the financial burden on households. Also, public sector oil retailers cut petrol and diesel prices by ₹2/litre, ending a nearly two-year-long hiatus in rate revision.

“Food price uncertainties continue to weigh on the inflation trajectory going forward. A record rabi wheat production would help temper price pressure and replenish the buffer stocks. Moreover, early indication of a normal monsoon augurs well for the kharif season,” RBI said.

RBI said inflation has come down significantly but remains above the 4% target. Food inflation continues to exhibit considerable volatility impeding the ongoing disinflation process.

“Our ongoing effort is to ensure fuller transmission of policy actions and anchoring of household inflation expectations. The strong growth momentum, together with our GDP projections for 2024-25, give us the policy space to unwaveringly focus on price stability,” RBI said.

The RBI has the mandate to contain retail or consumer price index (CPI) inflation at 4%, within a band of +/-2%. Mr. Das said two years ago, around this time, when CPI inflation had peaked at 7.8% in April 2022, the elephant in the room was inflation.

“The elephant has now gone out for a walk and appears to be returning to the forest. We would like the elephant to return to the forest and remain there on a durable basis.”

“In other words, it is essential, in the best interest of the economy, that CPI inflation continues to moderate and aligns to the target on a durable basis. Till this is achieved, our task remains unfinished,” Mr. Das said.

The retail inflation in February was 5.1%, while inflation in the food basket was at 8.66%. For the 2023-24 fiscal, RBI has projected average retail inflation at 5.4%.

The spike in food prices has kept the Reserve Bank of India (RBI) worried even though overall inflation has moderated to a certain extent.

On April 5, the Central bank’s Monetary Policy Committee decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. This is the seventh time that the rates have been kept on hold.

“The Monetary Policy Committee (MPC) remains focused on aligning inflation to the target on a durable basis. We derive satisfaction from the progress made under disinflation. But the task is not yet finished,” RBI Governor Shaktikanta Das said at a press conference after the MPC meeting.

RBI Monetary Policy updates | Policy repo rate unchanged at 6.5%; real GDP growth for FY25 projected at 7%

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

Food price uncertainties

In his monetary policy statement, Mr. Das said, “Food price uncertainties continue to weigh on the inflation trajectory going forward. A record rabi wheat production would help temper price pressure and replenish the buffer stocks. Moreover, early indication of a normal monsoon augurs well for the kharif season.”

“International food prices also remain benign. The tight demand supply situation in certain categories of pulses and the production outcomes of key vegetables warrant close monitoring, given the forecast of above normal temperatures in the coming months,” he said.

“Frequent and overlapping adverse climate shocks pose key upside risks to the outlook on international and domestic food prices,” he said, adding that as per the Indian Mereological Department’s forecast, the months of April, May, and June will witness above normal maximum temperatures in most parts of the country. 

Volatile food inflation

Answering a question on what is fuelling food inflation, RBI Deputy Governor Michael D. Patra told The Hindu, “Food inflation has been highly volatile. In February 2024 it was 7.8% and the indications are that in view of adverse climate events recurring, it will remain high.”

“The actors keep shifting. Sometime it is cereals, then vegetables and currently it is protein which is eggs, meat and fish. There is some firmness in rice prices,” he said. “These are short duration spikes but since they occur on multiple occasions, they give a persistent character. So what we are worried about is that there should not be any spillover to the rest of the CPI. So we remain watchful, very closely.” Mr. Patra added.

Growth-inflation dynamics

Overall inflation has been controlled to a certain extent; since the last policy, the growth-inflation dynamics have played out favourably.

While growth has continued to sustain its momentum, surpassing all projections. headline inflation has eased to 5.1% during January and February 2024 from 5.7% in December 2023, with core inflation declining steadily over the past nine months to its lowest level in the series, Mr. Das said in his monetary policy statement.

He added that the fuel component of the CPI remained in deflation for six consecutive months; food inflation pressures, however, accentuated in February.

“Looking ahead, robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4%. As the uncertainties in food prices continue to pose challenges, the MPC remains vigilant to the upside risks to inflation that might derail the path of disinflation,” he said.

“Under these circumstances, monetary policy must continue to be actively disinflationary to ensure anchoring of inflation expectations and fuller transmission of the past actions. The MPC, therefore, decided to keep the policy rate unchanged at 6.50% in this meeting and remain focused on withdrawal of accommodation. The MPC will remain resolute in its commitment to aligning inflation to the target,” he added.

Fuel price deflation

Mr. Das said that cost push pressures faced by firms were seeing an upward bias after a period of sustained moderation.

“Deflation in fuel is likely to deepen in the near term, following the cut in LPG prices in March. Notwithstanding the cut in petrol and diesel prices in mid-March, the recent uptick in crude oil prices needs to be closely monitored. Continuing geo-political tensions also pose upside risk to commodity prices and supply chains,” he said.

Assuming a normal monsoon, CPI inflation for 2024-25 is projected at 4.5% with Q1 at 4.9%; Q2 at 3.8%; Q3 at 4.6%; and Q4 at 4.5% . The risks are evenly balanced.

Growth prospects

Around this time two years ago, when CPI inflation had peaked at 7.8% in April 2022, the elephant in the room was inflation, Mr. Das said. “The elephant has now gone out for a walk and appears to be returning to the forest. We would like the elephant to return to the forest and remain there on a durable basis. In other words, it is essential, in the best interest of the economy, that CPI inflation continues to moderate and aligns to the target on a durable basis. Till this is achieved, our task remains unfinished,” he said.

On growth prospects, the Governor said that headwinds from geopolitical tensions, volatility in international financial markets, geoeconomic fragmentation, rising Red Sea disruptions, and extreme weather events pose risks to the outlook.

Taking all these factors into consideration, real GDP growth for 2024-25 is projected at 7%, with Q1 at 7.1%; Q2 at 6.9%; Q3 at 7%; and Q4 at 7%. The risks are evenly balanced.

Reserve Bank of India Governor Shaktikanta Das.
| Photo Credit: PTI

The Reserve Bank of India (RBI) on February 8 projected GDP growth for the next financial year at 7% on the back of improved household consumption and upturn in private capex cycle.

The real GDP growth is, however, lower than 7.3% estimated by the National Statistical Office (NSO) for the current 2023-24 fiscal aided by strong domestic economic activity and investments. The Indian economy grew 7.2% in 2022-23 fiscal.

In its Monetary Policy Statement, 2023-24, RBI Governor Shaktikanta Das said the recovery in rabi sowing, sustained profitability in manufacturing and underlying resilience of services should support economic activity in 2024-25.

“Among the key drivers on the demand side, household consumption is expected to improve, while prospects of fixed investment remain bright owing to upturn in the private capex cycle, improved business sentiments, healthy balance sheets of banks and corporates; and government’s continued thrust on capital expenditure,” Mr. Das said.

The improving outlook for global trade and rising integration in the global supply chain will support net external demand. The RBI flagged headwinds from geopolitical tensions, volatility in international financial markets and geo-economic fragmentation as risks to growth outlook.

“Taking all these factors into consideration, real GDP growth for 2024-25 is projected at 7% with Q1 (April-June) at 7.2%; Q2 at 6.8%; Q3 at 7% and Q4 at 6.9%. The risks are evenly balanced,” Mr. Das said.

To keep inflation within the targeted 4% (+/-2%) band, the RBI on February 8 retained benchmark interest rate or repo at 6.5%.

The interest rate setting monetary policy committee (MPC) also decided to remain focussed on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

“Global growth is likely to remain steady in 2024 after a surprisingly resilient performance in a turbulent year gone by. Inflation is edging down from multi-decade highs, with intermittent upticks,” Mr. Das said.

Mr. Das said rural demand in India continues to gather pace, urban consumption remains strong and investment cycle is gaining steam on the back of increased capex. Also, there are signs of revival in private investments.

Reserve Bank of India Governor Shaktikanta Das. File
| Photo Credit: PTI

Digital Rupee users will soon be able to execute transactions in areas with limited internet connectivity as the Reserve Bank of India (RBI) on February 8 announced that offline capability will be introduced on the Central bank digital currency (CBDC) pilot project.

RBI Governor Shaktikanta Das said that programmability-based additional use cases will be introduced as part of the pilot project. RBI launched a pilot of the retail CBDC in December 2022 and achieved the target of having 10 lakh transactions a day in December 2023.

It can be noted that other payment platforms, especially the very popular Unified Payments Interface (UPI), already offer offline possibilities.

“It is proposed to introduce an offline functionality in CBDC-R (Retail) for enabling transactions in areas with poor or limited internet connectivity,” Mr. Das said while announcing the bimonthly monetary policy review.

He said multiple offline solutions, which include both proximity and non-proximity based ones, will be tested across hilly areas, rural and urban locations for the purpose.

On the programmability front, he said that currently, the system enables Person to Person (P2P) and Person to Merchant (P2M) transactions using digital rupee wallets provided by pilot banks.

“It is now proposed to enable additional use cases using programmability and offline functionality,” he said.

“The programmability feature will permit users such as government agencies to ensure that payments are made for defined benefits,” he said, adding that corporates will also be able to programme specified expenditures like business travel for their employees.

“Additional features such as validity period or geographical areas within which CDBC may be used can also be programmed,” he said.

Meanwhile, Mr. Das also announced RBI’s intent to enhance the security features of Aadhaar enabled Payment Systems (AePS), which was used by 37 crore people in 2023.

“To enhance the security of AePS transactions, it is proposed to streamline the onboarding process, including mandatory due diligence, for AePS touch point operators, to be followed by banks,” Mr. Das said, adding that instructions on the same will be issued shortly.

At present, Mr. Das said lenders are using the SMS method for complying with the additional factor authentication requirements but advancements in technology have opened up newer means.

“To facilitate the use of such mechanisms for digital security, it is proposed to adopt a principle-based “Framework for authentication of digital payment transactions”,” he said.

New Delhi:

Reserve Bank Governor Shaktikanta Das today said Rs 2,000 denomination notes are coming back and only Rs 10,000 crore worth of such notes are still with people.

He exuded confidence that these notes will also be returned or deposited back.

“Rs 2,000 notes are coming back and only Rs 10,000 crore is left in the system. The expectation is that the amount will also come back,” he said on the sidelines of the event.

Earlier this month, Das had said 87 per cent of the Rs 2,000 denomination notes being withdrawn have returned as deposits into banks while the rest has been exchanged across counters.

On May 19, the Reserve Bank of India (RBI) took the financial world by surprise when it declared its plan to phase out the Rs 2,000 note, which had been introduced in 2016 as part of a rapid remonetisation effort.

This had followed Prime Minister Narendra Modi’s announcement to withdraw more than 88 per cent of the currency in circulation by invalidating the Rs 500 and Rs 1,000 notes.

Public and entities holding such notes were initially asked to either exchange or deposit them in bank accounts by September 30. The last date was later extended to October 7.

On October 7, both deposit and exchange services at bank branches were discontinued.

Starting October 8, individuals were provided with the choice of either exchanging the currency or having the equivalent sum credited to their bank accounts at 19 Reserve Bank of India locations.

Individuals or entities can exchange Rs 2,000 bank notes at the 19 RBI offices up to a limit of Rs 20,000 at a time. However, there is no limit on the total amount for getting Rs 2,000 notes credited into bank accounts.
 

The Reserve Bank of India has decided to retain the policy rate for the fourth time in a row, RBI Governor Shaktikanta Das said today, adding that the central bank is closely monitoring inflation. The governor said the Monetary Policy Committee (MPC)

Here are the top quotes from the RBI governor’s address:

New Delhi:

Reserve Bank Governor Shaktikanta Das today said the central bank is committed to bringing down inflation to 4 per cent and will remain watchful of risks as more frequent global supply shocks can have profound implications on the management of the price situation.

Delivering a lecture at the Delhi School of Economics, the governor said the RBI remains on guard to ensure that the second-order effects in the form of generalisation and persistence with regard to inflation are not allowed to take hold.

The central bank has been mandated by the government to keep inflation at 4 per cent with a margin of 2 per cent on either side.

“The frequent incidences of recurring food price shocks pose a risk to the anchoring of inflation expectations, which has been underway since February 2022. We will remain watchful of this aspect also.

“The role of continued and timely supply side interventions as is being undertaken by the government assumes criticality in limiting the severity and duration of such food price shocks,” he said.

In these circumstances, he said, it is necessary to be watchful of any risk to price stability and act timely and appropriately.

“We remained firmly focused on aligning inflation to the target of 4 per cent,” he said without giving any time frame.

He also said that inflation, which had touched a high of 7.4 per cent in July, driven by a rise in vegetable prices, has started moderating.