The RBI’s Monetary Policy Committee has voted unanimously to keep the policy repo rate unchanged at 4 percent and Reverse repo rate unchanged at 3.35 percent. The announcement came in the morning of February 10, where Apex Bank’s Governor Shaktikanta Das declared to keep this accommodative stance as long as required. While interacting with Media, RBI Governor also addressed the issue of Cryptocurrencies and its rising mania.
This step of the Reserve Bank of India means that existing and new borrowers will continue to enjoy benign interest rates as of now. Moreover, In regards with Home loans many banks have rolled out attractive festive offers with discounted interest rates. Such an offer is similarly available on other retail loan categories. This comes as a great chance for the Existing borrowers who can use this opportunity to reduce their interest burden by the means of switching lenders.
With the gaining popularity of Cryptocurrencies especially among the youth, Das on February 10 warned the country that the Cryptocurrency is a threat to India’s macroeconomic stability and investors betting on it are doing it at their own risk. While addressing the media after sharing the monetary policy committee outcome, Shaktikant Das said, “As far as cryptocurrencies are concerned, the RBI stance is very clear. Private cryptocurrencies are a big threat to our financial and macroeconomic stability. They will undermine RBI’s ability to deal with issues related to financial stability.”
Those who are unversed, RBI is planning to develop its own digital rupee. In the Union Budget, Finance Minister Nirmala Sitharaman announced that a central bank digital currency would be ready by sometime in the next financial year that starts on April 1.
Das also said ,“We are making progress on CBDCs after carefully, cautiously examining it because there are risks.The biggest risk is of cyber security and possibility of counterfeiting. We should absolutely prevent that.”
RBI ‘s Governor for the first time issued a statement in support of Digital Currency after the government made it a taxable asset in the Union Budget 2022.
Das said ,“I think it is my duty to tell investors that what they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk. They should keep in mind that these cryptocurrencies have no underlying (asset). Not even a tulip”.
Nowadays, The increasing popularity of cryptocurrencies is equated with Europe’s Tulip Mania that had gripped especially the Netherlands, in the 17th century, which had ended badly . The RBI has highlighted its concerns on Private Crypto Currencies in its Financial Stability Report (FSR) which was released on December 29.It was mentioned in the Report that these instruments pose immediate risks to customer protection and anti-money laundering (AML) and combating the financing of terrorism (CFT).
Despite RBI’s repeated warnings to the Investors, they still continue to put money in crypto assets.
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