New Delhi: Even as the world awaits the US Federal Reserve announcement on a likely rate cut, State Bank of India (SBI) chairman C S Setty said that the Reserve Bank of India (RBI) is unlikely to ease the benchmark policy rate during 2024 as the uncertainty over food inflation continues.
The US Federal Reserve is expected to announce the first cut in interest rates in over four years today. If the US announces rate cuts, central banks across the world will be under pressure to follow suit.
Speaking to PTI, the SBI chairman said is US Fed Reserve announces rate cuts, other central banks of the world would be influenced, however, RBI would consider inflation figures before taking any decision.
“On the rate front, a lot of central banks are taking independent calls. While Fed rate cut would influence everyone, RBI would be mindful of the food inflation before taking a call on interest rate cut,” Setty, who took over the reins of the bank recently, told PTI in an interview.
“That is what our view is, and our view is also that the rate cut during the current calendar year may not happen, probably we may have to wait for Q4 (January-March 2025) unless there is a good improvement in terms of food inflation,” he said.
The SBI chief’s statement assumes importance as it comes days ahead of the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das which is scheduled to meet during October 7-9. The RBI kept the repo rate unchanged at 6.5 per cent in its August bi-monthly review as it raised concerns over higher food inflation.
The repo rate was kept unchanged for the ninth consecutive MPC meeting which decided to maintain the status quo on the rate front. The central bank has not changed the benchmark repo rate since February 2023. It may be noted that the retail inflation increased marginally to 3.65 per cent in August, from 3.54 per cent in July.
RBI is unlikely to cut interest rate in 2024, SBI chief CS Setty said. The India’s central bank kept the repo rate unchanged at 6.5 per cent in its August bi-monthly review. Economy Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
