RBI MPC Meeting June 2023: Net FPI inflows at $8.4 bn for current fiscal year, says RBI Governor

Foreign portfolio investment (FPI) flows have seen a significant turnaround in 2023-24 led by equity flows, said RBI governor Das during the credit policy announcement.

Net foreign portfolio investment (FPI) inflows for the current fiscal year as of June 6 were $8.4 billion, compared to net outflows for the two preceding years of $14.1 billion and $5.9 billion.

Das said, 'Net FPI flows to India were $28 billion in 2022-23 compared to $38.6 billion in the previous year.'

For FY2024, real GDP growth is predicted at 6.5%. Das predicted that the GDP would grow by 8% in Q1 FY2024, 6.5% in Q2, 6% in Q3, and 5.7% in Q4.

Consumer price inflation in India eased during March-April 2023, dropping from 6.7% in 2022–2023 and entering the tolerance range.

Das also said 'However, according to the most recent data and our predictions for 2023–24, headline inflation is still over the target'. According to Das, inflation would continue to be above 4% in 2023 and 2024.

'Taking into account all factors and assuming a normal monsoon, CPI headline inflation is projected at 5.1% for 2023-2024,' RBI Governor said on Thursday.

Das concluded that the 'Goal is to reach the targeted 4% inflation going forward, our monetary policy actions are yielding desired results giving us space to keep rates unchanged in this meeting'.

Foreign Portfolio Investment (FPI): What Is It?

Securities and other financial assets held by investors in another country make up foreign portfolio investment (FPI). Depending on the turbulence of the market, it is relatively liquid but does not provide the investor direct ownership of a company's assets. FPI is one of the popular ways to invest in a foreign economy, along with foreign direct investment (FDI). For the majority of economies, both FDI and FPI are significant sources of funding.

RBI Monetary Policy briefing

The Reserve Bank of India monetary policy committee (MPC) has once again left the repo rate unchanged at 6.5%, in line with what economists were expecting.

The RBI governor in his policy announcement said that the withdrawal of accommodation stance has been maintained and further monetary action will be taken promptly as required.