The Reserve Bank of India plans to introduce long-lasting polymer currency notes next fiscal year, alongside its strategic focus on inflation control and maintaining an orderly rupee trajectory.
Key Points
- RBI aims to introduce durable polymer currency notes by the beginning of the next financial year.
- Polymer notes are expected to last over 30 years and will be beneficial for lower denominations.
- The central bank's future interest rate decisions will be data-dependent, with a primary focus on achieving a 4 per cent inflation target.
- Foreign Currency Non-Resident (Bank) scheme flows are robust, with no current plans for premature closure.
- The RBI seeks an orderly rupee trajectory, with further strengthening possible if geopolitical tensions ease.
RBI Governor Sanjay Malhotra on August 5, Wednesday, said the Reserve Bank of India is targeting to launch long-lasting polymer currency notes at the beginning of the next financial year.
Speaking to reporters at the customary briefing after the monetary policy review, Malhotra said the polymer currency notes have lasted for over 30 years in some jurisdictions and will come in handy, especially for the lower denomination notes which have high velocity.
"We are targeting that they are in circulation, if everything goes as per plan, in the beginning of the next financial year," Malhotra said.
RBI's Stance On Inflation And Rupee
Malhotra said the next move of the Reserve Bank of India (RBI) on the crucial aspect of interest rates and also the stance of the policy will be data-dependent, and underlined that the prime focus of the central bank is to align the headline inflation with its target of 4 per cent over the medium term.
Commenting on the Foreign Currency Non-Resident (Bank) scheme, Malhotra said the flows have been "robust", and the RBI expects healthy movement of funds going forward till the closure of the limited-period scheme.
When asked if the central bank is looking to close the scheme prematurely, given that there is a cost which the RBI is committed to bear for the fund inflows, Malhotra said there is no such proposal at this point of time.
After being pointed out that the rupee has not appreciated as intended despite the high flows from foreign shores, Malhotra said a further strengthening in the rupee is possible if geopolitical tensions de-escalate.
It will be the RBI's endeavour that the trajectory for the rupee remains orderly, he added.
