Rate cut ‘risky, premature’ as growth remains steady, says RBI’s Shaktikanta Das

October 18, 2024 - By admin

Reserve Bank of India governor Shaktikanta Das during India Credit Forum hosted by Bloomberg said cutting interest rates in coming Monetary Policy Committee meeting scheduled for December would be ‘risky and premature’ as country’s growth remains steady with inflation expected to moderate.

Recently, central bank’s rate-setting panel decided to keep the repurchase rate (repo rate) unchanged at 6.5 per cent.

“Interest rate cut at this stage will be premature and very very risky,” said RBI Governor Shaktikanta Das during the fireside chat.

“We are not behind the curve. India growth story remains intact. Growth is resilient. Inflation is moderating. A rate cut at this stage will be risky. We have to wait for the incoming data and overall inflation outlook,” added Das on possible rate cuts in December MPC meeting.

While inflation is expected to moderate, there are “significant risks” to the outlook, Das told Bloomberg News Deputy Editor-in-Chief Reto Gregori at the India Credit Forum in Mumbai on Friday. He added that the central bank wasn’t “behind the curve” and needed to be “vigilant” on inflation.

Das last week kept the central bank’s forecast for the current fiscal year unchanged at 7.2 per cent, while the government’s own projection is a more subdued 6.5 to 7 per cent. (more to come)