The easing inflation and weakening job market trends in the US, as revealed in the recent figures will push the Federal Reserve to cut interest rates which will lead to lower rates in developing countries like India, indicates S&P Global on Friday.
The Reserve Bank of India (RBI) may begin lowering interest rates around October, provided that external factors like weather conditions and international commodity prices do not cause any disruptions, the credit rating agency, Crisil said in its report.
The Indian benchmark indices traded weak after opening on a negative note on Thursday, reacting to the unchanged policy repo rate announced by the Reserve Bank of India
At the post-monetary policy press briefing, RBI Governor Shaktikanta Das said that GDP growth figures in the US are doing well and it was not right to rush to a conclusion that the country was slowly slipping into recession.
Economists and Industry bodies have welcomed RBI's move to keep the policy repo rate unchanged they said that maintaining the repo rate provides stability and predictability in the financial markets.
Governor Das stated, "After a detailed assessment of the evolving macroeconomic and financial conditions and the overall outlook. It decided by a majority of four members to keep the policy repo rate unchanged at 6.5 per cent."
Adding the reasons behind its anticipation, the credit agency further emphasized factors such as the inflation and, overall risk of food inflation due to the above-normal monsoon will influence the decision of the monetary committee.
The Reserve Bank of India (RBI) is unlikely to change the repo rate, say experts. The three-day monetary policy committee (MPC) meeting to decide on policy rates begins tomorrow, August 6.
In its 49th MPC meeting held between June 5 and 7, it was decided to maintain the status quo on key interest rates, reflecting a balanced approach towards sustaining economic growth while keeping inflation in check.
Delhi-NCR [India], June 10: For the eighth consecutive time, the RBI has decided to keep the repo rate unchanged at 6.5%. This decision, combined with optimistic GDP growth projections, massive infrastructural development, an increased pace of project launches, and robust demand, is expected
SBI Capital Markets anticipated the interest rate cut in the late calendar year of 2024, adding that the Reserve Bank of India (RBI) is now focusing on local disinflation and growth while monitoring global trends.