Demonetisation

As I commenced lectures with my Second Year students today I couldn't help but think about the Demonetisation of 2016.
After all the suffering of the average citizen it looks like black money never existed or more likely the hoarders found a way to make it legit!
Banks have enjoyed an influx of cash.
Digital payments are up.
Economic growth seems to have suffered.

HIGHLIGHTS from RBI’s 2nd MPC — June 2018 FY19

1. Repo rate under the liquidity adjustment facility (LAF) has been raised by 25 basis points to 6.25% in a first rate hike in four-and-half-years.
2. Reverse repo rate under the LAF stands adjusted to 6% and the marginal standing facility (MSF) rate and the Bank Rate has been adjusted to 6.5%.
3. The MPC has decided to retain the projection of GDP growth for the financial year 2018-2019 at 7.4% with risk evenly balanced around this number.
4. All six members of the MPC including RBI Governor Urjit Patel and Dr Chetan Ghate, Dr Pami Dua, Dr Ravindra H. Dholakia, Dr Viral V. Acharya Dr Michael Debabrata Patra voted for 0.25% rate hike.
5. RBI has projected retail inflation at 4.8-4.9% for the period of April-September and 4.7% in H2 FY19.
6. RBI Governor has said that the forecast of normal monsoon for 2018-19 augurs well for the agriculture sector.
7. Emerging market currencies have by and large got depreciated against the US dollar. The geopolitical risks, financial market volatility and trade protectionism will further impact domestic growth.
8. According to RBI, the adherence to budgetary targets by the central government and the respective state government will ease upside risks to the inflation outlook.
9. The major upside risk to the inflation path is due to continuous rise price of crude oil as Brent crude rose to $76 a barrel from a level of $67 per barrel during April meeting of MPC.
10. RBI pointed that the volatility in the crude oil prices has added to uncertainty to the inflation outlook.
11. Investment activity is recovering well in the context of IBC (Insolvency and Bankruptcy Code) and will further get a boost from swift resolution under IBC.
12. The Reserve Bank of India’s next Monetary Policy Committee meeting is scheduled on 31 July and 1 August 2018.     WATCH THIS SPACE