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Monetised Deficit

About Monetised Deficit

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What is Monetised Deficit

Monetised deficit is the monetary support the Reserve Bank of India (RBI) extends to the Centre as part of the government's borrowing programme. In other words, the term refers to the purchase of government bonds by the central bank to finance the spending needs of the government.
 
Also known as debt monetisation, the exercise leads to an increase in total money supply in the system, and hence inflation, as RBI creates fresh money to purchase the bonds. The same bonds are later used to bring down inflation as they are sold in the open market. This helps RBI suck excess money out of the market and rein in rising prices.

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Latest News

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Updated On: 24 Jun 2026 | 11:04 PM IST

ADB offers assistance to develop industrial, logistics infra in West Bengal

ADB has proposed funding economic regions, logistics hubs, industrial corridors and tourism projects to accelerate infrastructure-led growth in West Bengal

Updated On: 24 Jun 2026 | 10:59 PM IST

Adani group firms rally after AGM; Morgan Stanley raises Adani Power target

Group companies gained after Gautam Adani outlined expansion plans at the AGM, while Morgan Stanley raised its target price for Adani Power and retained an overweight rating

Updated On: 24 Jun 2026 | 10:58 PM IST

PM lauds successful NEET-UG retest, stresses whole-of-government approach

The prime minister cited the example of the NEET retest and stressed on coordination between various ministries while adopting a "whole of government approach" in resolving issues

Updated On: 24 Jun 2026 | 10:53 PM IST

Odisha plans engineering department overhaul as capex utilisation slows

The state is considering cadre reforms and restructuring engineering wings after manpower shortages hindered utilisation of one of India's largest capital expenditure allocations

Updated On: 24 Jun 2026 | 10:52 PM IST

Adani Power to invest over ₹2 trn in five years, target 45 GW capacity

Gautam Adani says the group is expanding across power, nuclear energy, transmission, ports, data centres and cement, backed by large-scale infrastructure investments

Updated On: 24 Jun 2026 | 10:51 PM IST

Andhra mine promises gold output at scale as private sector enters mining

Located across three villages - Jonnagiri, Erragudi and Pagidirayi - the project, called the Jonnagiri Gold Mine, is India's first commercial-scale private-sector gold mining operation

Updated On: 24 Jun 2026 | 10:48 PM IST

RBI sets compliance blueprint for AI-driven finance under draft framework

The draft framework requires regulated entities to establish board-approved model risk management systems covering all models, including AI and machine learning applications

Updated On: 24 Jun 2026 | 10:48 PM IST

Welfare bills, rising commitments drag 4 states from surplus to deficit

Karnataka, Telangana, Chhattisgarh, and Bihar saw revenue balances weaken between FY23 and FY25 as spending outpaced receipts: CAG

Updated On: 24 Jun 2026 | 10:46 PM IST

RBI drops separate onshore-offshore foreign-exchange position calculation

The revised framework aligns foreign exchange risk calculations with Basel standards and allows certain structural foreign-currency exposures to be excluded from NOP calculations

Updated On: 24 Jun 2026 | 10:46 PM IST

Mospi proposes framework to assign monetary value to India's coal reserves

The ministry has recommended the OECD methodology for valuing coal reserves, saying it could strengthen natural capital accounting and support evidence-based policymaking

Updated On: 24 Jun 2026 | 10:44 PM IST

SK Hynix plans to raise $29 billion in landmark US listing amid AI boom

SK Hynix plans a $29.4 billion US listing to expand chip capacity, as soaring AI demand fuels one of the biggest share sales in history

Updated On: 24 Jun 2026 | 10:43 PM IST

Mospi to launch India's first monthly services output index on July 14

The new monthly indicator will track short-term changes in services-sector output and serve as the counterpart to the Index of Industrial Production

Updated On: 24 Jun 2026 | 10:40 PM IST

Can USA really win the FIFA World Cup? Why host nations always pack a punch

After back-to-back group-stage victories and qualification for the Round of 32, what initially felt like optimism has begun evolving into belief.

Updated On: 24 Jun 2026 | 10:38 PM IST

Valuations still high, massive return of FPI flows unlikely: Ambit Capital

The brokerage says elevated valuations, stronger opportunities in developed markets and the rise of AI-related investments could limit foreign inflows into Indian equities

Updated On: 24 Jun 2026 | 10:37 PM IST

SIP return recovery and West Asia truce may revive retail MF momentum

Small- and mid-cap fund SIP returns have rebounded sharply, raising hopes of renewed retail investor interest after a moderation in key MF growth indicators

Updated On: 24 Jun 2026 | 10:37 PM IST

Energy stress, weak monsoon to slow India's growth to 6.6% in FY27: S&P

The rating agency expects higher inflation, a possible RBI rate hike and slower economic growth amid energy market disruptions and below-normal monsoon conditions

Updated On: 24 Jun 2026 | 10:35 PM IST

What Sebi's new framework for securities transfer means for heirs

Succession-related issues can add to the difficulty. Legal heirs often need multiple documents. Coordinating several heirs can be difficult

Updated On: 24 Jun 2026 | 10:34 PM IST

Banks lead market rebound after RBI governor's remarks lift sentiment

Policy worries fade; clarity on foreign currency deposit lifts lenders

Updated On: 24 Jun 2026 | 10:32 PM IST

RBI caps compensation for digital fraud victims at ₹25,000 under new norms

However, the central bank has deferred the implementation of the framework by six months, from July 1, 2026, to January 1, 2027

Updated On: 24 Jun 2026 | 10:30 PM IST