RPI Monetary Policy: With UPI becoming hugely popular for retail digital payments in India, the Reserve Bank of India (RBI) on Wednesday proposed to permit all inbound travellers to India to use UPI for their merchant payments (P2M) while they are in the country.

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"To begin with, this facility will be extended to travellers from G-20 countries arriving at select international airports," Governor Shaktikanta Das said.

The RBI will also launch a pilot project on QR Code-based Coin Vending Machines (QCVM) in 12 cities. These vending machines will dispense coins against debit to the customer's account using UPI instead of physical tendering of banknotes. This will enhance the ease of accessibility to coins.The central bank also allowed lending and borrowing of government securities or G-secs with a view to "provide investors with an avenue to deploy their idle securities, enhance portfolio returns and facilitate wider participation".

"This measure will also add depth and liquidity to the G-sec market; aid efficient price discovery; and work towards a smooth completion of the market borrowing programme of the centre and states," Das said.

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The RBI also restored market hours for the Government Securities market to the pre-pandemic timing of 9 am to 5 pm.

On the rupee, Das said it has remained one of the least volatile currencies among its Asian peers. The depreciation and the volatility of the Indian rupee during the current phase of multiple shocks is far lower than during the global financial crisis and the taper tantrum.

In a fundamental sense, the movements of the rupee reflect the resilience of the Indian economy, he said.

The current account deficit (CAD), which stood at 3.3 per cent in the first half of 2022-23, is expected to moderate in the second half and "remain eminently manageable and within the parameters of viability".

Das also said draft guidelines for the levy of penal interest on advances will be issued for comments.

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