Users will be able to transact with e-rupee through a digital wallet offered by the participating banks and stored on mobile phones or devices, the central bank said.

The ratings agency took into account higher inflation, high interest rates and slowing global growth that, it believes, will dampen economic momentum more than it had expected.

The order takes immediate effect and the mechanism is designed to "promote growth of global trade with emphasis on exports," the RBI said.

Traders said the RBI was spotted selling dollars via state-run banks sporadically to brake the decline in the rupee but the direction of the currency is unlikely to be altered any time soon.

'Central bank digital currencies' or CBDCs are digital or virtual currencies that are basically the digital version of fiat currencies.

India's economic recovery from pandemic-related shutdowns is at risk of a further delay in the second half of this fiscal year

The higher-than-expected dividend or surplus transfer to the government comes as it is expecting a sharp sequential fall in tax collections due to a severe second wave of COVID-19 which has forced lockdowns.

The central bank believes the economic slowdown was not as severe as a year ago.

The RBI kept the repo rate or its key lending rate steady at 4% while the reverse repo rate or its borrowing rate was left unchanged at 3.35%.

Structural reforms to unlock growth are needed but may lack support with growth and employment depressed, Deputy Governor Michael Patra said.

Since February, the RBI has cut the repo rate by a total 110 basis points.

The RBI had retained its "neutral" stance after the rate cut in April but traders said a change in this stance to "accommodative" will be more comforting for markets than just a rate cut.