To sum up, the RBI governor Urjit Patel has indeed brought some good news for economy despite the absence of a rate cut boost and the Modi government can cheer these but this optimistic assessment is fraught with risks.
Following the decision, the repo rate, at which the central bank lends short-term money to other banks, will continue to stay at 6 percent. Dr. Michael Debabrata Patra voted for an increase in the policy rate of 25 basis points.
The RBI on Thursday did what was widely expected, keeping the policy rates unchanged at six per cent. The RBI expects inflation to reach an average of 4.7 percent - 5.1 percent in the first half of this year and projects it to reach 4.4 percent in the second half of 2018.
Despite maintaining a "neutral" stance, the central bank has turned bullish and the policy has a "dovish" tone as it lowered inflation projection in the fiscal year 2018-19. These include worldwide crude oil prices which has been volatile in the recent period.
In its bi-monthly policy review in February, RBI had projected inflation in the 5.1-5.6% range in the first half of 2018-19. "Continuous monitoring and surveillance is essential to reduce the risks of data breach", he said.
"We don't anticipate a change in the repo rate, or stance of monetary policy until greater clarity emerges towards the second half of the year on the impact of minimum (crop) support prices and monsoon on the inflation trajectory", said Aditi Nayar, the principal economist of rating agency ICRA. "By supporting blockchain and cryptocurrency, RBI could have given Indians an opportunity to be at the forefront of a global phenomenon, act ahead of time and be future-secured with our own set of digital assets".
Internationally, while regulatory responses to such tokens are not uniform, it is universally felt that they can seriously undermine the anti-money laundering/FATF (Financial Action Task Force) framework, and adversely impact market integrity and capital control. One reason why growth will improve is the fact that bank balance sheets are being fixed with the resolution process under way involving bad loans worth Rs3 trillion under the Insolvency and Bankruptcy Code. However, Patel did warn that "while global economic activity and trade have gathered momentum, financial market volatility and potential trade wars pose a threat to the outlook".
While Malwal believes it is an investor's individual decision to sell cryptocurrencies in the wake of RBI's three-month window, he adds that there are always ways to transfer the crypto assets to an worldwide exchange and get the money remitted from there.