RBI policy meet: The governor of the Reserve Bank of India (RBI) announced that the repo rate will remain unchanged at 6.5 percent. 

Additionally, the RBI projected a GDP growth of 7 percent for the financial year 2024-25, lower than the current fiscal year. The governor also stated that consumer price index inflation for the same period is projected at 4.5 percent. 

India’s foreign exchange reserves stood at $622.5 billion as of February 2, indicating a strong external sector.

 Lastly, the RBI proposed a principle-based framework for the authentication of digital transactions, while acknowledging the popularity of SMS-based OTP.

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RBI Monetary policy: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Thursday decided to keep its key policy rates unchanged. RBI bi-monthly Policy Committee (MPC) meeting, which commenced its meeting on February 6, and will conclude its three-day deliberation today.

10 Key highlights

1.RBI keeps repo rate steady at 6.5% with five out of six members voting in favour of the rate decision Experts were also expecting expecting the repo rate to remain steady at 6.5 per cent

2. MPC also decided by a majority (5 out of 6 members) to remain focused on withdrawal of accommodation to ensure the inflation progressively aligns with the target while supporting growth. Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement.

3.This is the sixth consecutive unchanged decision and comes after the Interim Budget was announced on February 1, 2024.

4. With the latest announcement, while the Fixed Reverse Repo Rate is at 3.75%, the bank rate is 6.75%, the marginal standing facility (MSF) rate is 6.25%, and the standing deposit facility rate is at 6.25%

5. RBI Governor said that the MPC remained resolute on containing inflation at target of 4%.

6. The Reserve Bank of India (RBI) has maintained its inflation projection at 5.4% for 2023–2024.

7.The January-March 2024 (Q4FY24) CPI inflation forecast has been cut to 5.0% from 5.2%.

8. CPI inflation is predicted to be 4.5% for the upcoming fiscal year 2024–2025, with Q1 at 5%, Q2 at 4%, Q3 at 4.6%, and Q4 at 4.7%.

9. Momentum in economic activity is expected to continue in fiscal year 2024-25 said the RBI Governor. The FY25 GDP growth is estimated at 7%, the RBI Governor said.

10.GDP forecast for Q1FY25 has been raised to 7.2% from 6.7%, Q2FY25 raised to 6.8% from 6.5%; Q3FY25 GDP growth forecast raised to 7.0% from 6.4%, while Q4FY25 GDP growth forecast has been pegged at 6.9%.

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This review has resulted in the removal of 2,200 apps from Google’s app store. Around 3,500 lending apps remain after the review. 

The government is taking further measures to address concerns about financial fraud, and a second review meeting on cybersecurity and financial frauds is scheduled for February 9. 

The DFS Secretary, Vivek Joshi, stated that the RBI’s whitelist has helped identify responsible stakeholders and that Google has tightened its uploading policy for lending apps. 

The Centre is also focusing on strengthening cybersecurity and has notified 40 institutions in the BFSI sector as critical information infrastructure. 

The DFS is working with the telecom ministry to develop a system for customers to block and report suspicious or fraudulent phone calls.

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In a shocking decision last week, the Reserve Bank of India had ordered Paytm Payments Bank not to accept fresh deposits or top-ups in any customer account, wallets or FASTags after February 29, citing non-compliance and regulatory concerns. Since then, the company has been working to allay users’ concerns, with CEO Vijay Shekhar Sharma also coming forward to confirm that the Paytm app will continue to work beyond February 29.

A recent report by Moneycontrol has now revealed that since the RBI order, there has been a significant increase in the number of downloads from the Google Play store for a number of Paytm’s competitors such as PhonePe, Google Pay and NPCI’s BHIM app.

The report, citing data from app intelligence firm Appfigures, noted that PhonePe saw a 45% week-on-week increase in app downloads with 2.79 lakh app downloads on February 3 compared to 1.92 lakh downloads on January 29. Meanwhile, in the four-day period following the RBI order, PhonePe saw a 24.1% increase in app downloads from 8.4 lakh downloads between January 24-27 to 10.4 lakh downloads between January 31 and February 3.

Another Paytm competitor, National Payments Corporation of India’s (NPCI) BHIM app also recorded a significant 21.5 % week-on-week increase in app downloads from 1.11 lakh downloads on January 27 to 1.35 lakh downloads on February 3. Moreover, during the four-day period from January 31 – February 3, the BHIM app witnessed a 50 per cent increase in app downloads from 3.97 lakh in the previous week to 5.93 lakh in the week ending February 3.

Meanwhile, Google Pay saw a modest week-on-week increase in the number of Android app downloads from 1.04 lakh on January 27 to 1.09 lakh on February 3. In the four days following the RBI decision, Google Pay saw an 8.4% increase in Android app downloads from 3.64 lakh in the previous week to 3.95 lakh downloads between January 31 – February 3.

Not only have downloads of Paytm’s rivals reportedly increased significantly, the Moneycontrol report notes that Android downloads of the Paytm app downloads also saw a 24 per cent week-on-week decline from 90,039 downloads on January 27 to 68,391 downloads on February 3. The company has also seen its ranking in the Google Play store drop from 18th to 40th in the free apps category.

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These bonds are considered part of the government’s borrowing, and their liabilities are calculated based on the market price of gold at the time of estimate preparation. 

The current value of outstanding SGBs held by the government is estimated to be Rs 69,998 crore, based on 131 tonnes of gold. 

The provision for SGB liabilities in FY25 has been revised upwards to Rs 96,136 crore, an increase of Rs 26,138 crore. Experts attribute this increase to the inclusion of bonds worth 40-45 tonnes of gold. 

SGBs have proven to be a popular investment due to their guaranteed return of 2.5% and exemption from capital gains tax on maturity.

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Prime Minister Narendra Modi said that India’s own energy demand will double by 2045 to 38 million barrels per day from current 19 million barrels a day.

The global oil market will require an investment of $14 trillion by 2045 to meet the rising energy demand of the world, said Haitham al-Ghais, Secretary General of the Organisation of Petroleum Exporting Countries on Tuesday.

“The demand for oil will continue to rise and there is a need to ensure that supply is maintained,” Ghais said while speaking at the India Energy Week in Goa. He further noted that there will be a rise of 23% in energy requirement of the world from now to 2045.

Earlier during the inaugration of the event, Prime Minister Narendra Modi said that India’s own energy demand will double by 2045 to 38 million barrels per day from current 19 million barrels a day.

The Secretary General also said that oil will continue to maintain its share as a source of energy in the coming years even as the world economies strive to triple their renewable energy capacity as no single source will be able to fuel the growth in world energy demand.

The discussion comes amid the rising uncertainties including the ongoing geopolitical tensions, demand-supply disruptions, and tighter sanctions that have kept global oil market under pressure lately.

“We need to invest (in oil) to be able to ensure the security and reliability of the supply is maintained,” Ghais said. India’s Union Minister for Petroleum and Natural Gas Hardeep Singh Puri said that most of the crisis faced during the past few years were ‘self-inflicted’ and ‘policy induced’.

OPEC and energy ministers from Guyana and Qatar also stressed that there is a need to bring renewable energy in oil and gas sector but there still lies a long road ahead in completely phasing out conventional sources.

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The finance minister, Nirmala Sitharaman, has stated that the government’s efforts to control the rise in prices of essential commodities, particularly perishable goods, have led to a decrease in retail inflation.

 In response to a question in the Rajya Sabha, she mentioned that measures are being taken to improve the preservation of highly perishable products like onions. 

The government is collaborating with the Bhabha Atomic Research Centre to enhance the shelf life of onions through de-humidification using gamma rays. 

The ban on onion exports has resulted in a 70% decrease in prices, and the government has released a significant quantity of onions in the market at a fixed price. 

Import restrictions have also been modified to ensure reasonable onion prices. Similar steps have been taken for other perishable goods like tomatoes.

 The government regularly reviews the situation and has successfully kept inflation within acceptable limits.

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