Rate cuts unlikely: Even as the US Federal Reserve prepares for its first interest rate cut in more than four years, which is expected to set a trend for other central banks globally, the Reserve Bank of India ( Reserve Bank of India ) is not likely to cut its policy rate during 2024, he said OSE Chairman CS Setty, in an interview with PTI, mentioned that uncertainty around food inflation would make the RBI cautious in cutting rates. “Many central banks are taking independent decisions on rates. While the Fed cut will have some influence, the RBI will carefully consider food inflation before deciding on any rate cut,” he explained.
There will be no rate cuts soon
OSE The ECB expects any rate cuts could be postponed until the fourth quarter of the fiscal year, between January and March 2025, unless food inflation shows a significant improvement. “We do not foresee a rate cut this calendar year,” Setty added. Reserve Bank of India The Reserve Bank of India’s Monetary Policy Committee (MPC), headed by Governor Shaktikanta Das, is scheduled to meet from October 7 to 9 to review interest rates. In August, retail inflation rose slightly to 3.65 per cent, up from 3.54 per cent in July, while food inflation was higher at 5.66 per cent. Even though headline inflation was below the RBI’s target of 4 per cent, the central bank kept the repo rate unchanged at 6.5 per cent during its latest review, largely due to concerns over rising food prices.
This was the ninth consecutive meeting in which the Reserve Bank of India The policymaker maintained the status quo on rates. Four of the six members of the Monetary Policy Committee voted in favour of no changes, while two outside members suggested a rate cut.
Inflation-linked rates
Reserve Bank of India Governor Das recently stressed that any decision on rate easing would be guided by long-term inflation trends rather than short-term monthly data. OSE As for the company’s subsidiaries, Setty ruled out any immediate plans for divestment. He added that while the bank would provide growth capital to its subsidiaries if needed, none currently require financial support from the parent company.
In fiscal year 24, OSE infused Rs 489.67 crore into SBI General Insurance, slightly reducing its stake from 69.95 per cent to 69.11 per cent due to issuance of ESOPs to employees.
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