The downward revision in India's growth forecast by the IMF reflects a weaker-than-expected outlook for domestic demand.
"This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade," IMF Managing Director Kristalina Georgieva said.
His appointment has been cleared by the Appointments Committee of the Cabinet (ACC), which is headed by Prime Minister Narendra Modi.
The IMF warns that triggers for risk-off episodes abound
This is a downward revision of 0.3 per cent for both the years as compared to the IMF's previous projections early this year, it said.
The IMF has been at odds with US President Donald Trump over his use of tariffs to resolve trade imbalances, but its assessment that the dollar is overvalued is likely to give Trump more fodder for his frequent complaints that dollar strength is hampering US exports.
The IMF in its India section of the External Sector Report has said that although progress has been made on foreign direct investment (FDI) liberalisation, portfolio flows remain controlled.
Lagarde said in a statement her resignation was effective September 12, opening the way for the IMF to choose its next leader.
"The interim budget envisages a slower pace of fiscal consolidation than previously planned, delaying the time to reach the medium-term central-government debt target of 40 percent of GDP," Ranil Salgado, IMF mission chief for India told PTI.
A long pause in Asian central bank tightening could facilitate more inflows into Asian bonds and offer some respite to smaller-sized, low margin borrowers across south and southeast Asia.
Rice added that the IMF had "taken note of" Urjit Patel as the governor of the RBI and the appointment of Shantikanta Das as his replacement.
The IMF's regional outlook report published on Tuesday found that the overall fiscal deficit for the Mideast's oil exporters is projected to decline from around $118 billion last year to $41 billion this year, before narrowing to $3 billion in 2019.
Washington suspects that yuan's weakening strength against the dollar may be aimed at giving Chinese exports a trade advantage and offsetting US tariffs
Lagarde urged countries to "de-escalate" trade frictions and fix global trading rules, rather than abandon them.
The trajectory of GDP growth remains similar, but the Mundle committee report has magnified the divergences, effectively airbrushing the unflattering picture painted of the Manmohan Singh-led UPA government
Growth is forecast to rise to 7.3 percent in fiscal year 2018/19 and 7.5 percent in 2019/20 on strengthening investment and robust private consumption, the report said.
The IMF welcomed plans by Chancellor Angela Merkel's new coalition government to raise public investments and support long-term growth, but it said Berlin could do more.
In the context of rising inflation and additional upside risks to the forecasts due to higher oil prices, exchange rate depreciation and other domestic factors, the IMF thinks that this was an appropriate step by the RBI on Wednesday, Rice said.
French President Emmanuel Macron and Japanese Prime Minister Shinzo Abe are also expected to attend the investment forum, which will be chaired by Russian President Vladimir Putin.
The International Monetary Fund said the productivity spillover is important because, until recently, the production of knowledge and technology has been concentrated mostly in a handful of large industrialised economies, it observed.
The International Monetary Fund has said banking reforms like insolvency code and recapitalisation will be ineffective unless governance standards are improved.
The IMF chief was speaking at a session on the global economic outlook on the last day of the World Economic Forum (WEF) annual meeting in Davos.
Maintaining this positive trend will require strengthening the economy's resilience with greater exchange rate flexibility, fiscal discipline, and an adequately tight monetary policy stance, the IMF said.
Murray said the demonetisation did cause some temporary disruptions in economic activity, primarily, private consumption and small businesses due to cash shortages.
The IMF approved the USD 1.5 billion loan in June 2016 following a balance of payments crisis in Sri Lanka.