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NEW DELHI: The RBI is likely to cut interest rates only in early 2024, as it wants to see consumer inflation moving to 4% – the centre of its target range, global ratings agency S&P said on Monday.
Easing retail inflation had triggered hopes of a possible rate cut by the central bank, but uncertainties linked to the monsoon and the weather phenomenon El Nino have come as a major roadblock.
RBI governor Shaktikanta Das has said that the central bank will make all efforts to get to its 4% target but has said El Nino has emerged as a challenge.
Striking a hawkish note, Das said, “Our job is only half done, having brought inflation within the target band. Our fight against inflation is not yet over. We need to undertake a forward-looking assessment of the evolving inflation-growth outlook and stand ready to act, if the situation so warrants.” He added that price stability and financial stability are mutually reinforcing and necessitate greater policy focus, according to the minutes of the monetary policy panel meeting.
S&P also said Asian emerging market economies remain among the fastest growing ones in its global growth outlook through 2026. India, Vietnam, and the Philippines continue to lead, with average growth of 6.7%, 6.6%, and 6.1% in 2023-2026, according to the agency. It said across the region, robust domestic demand dampened the external drag on overall growth.
Easing retail inflation had triggered hopes of a possible rate cut by the central bank, but uncertainties linked to the monsoon and the weather phenomenon El Nino have come as a major roadblock.
RBI governor Shaktikanta Das has said that the central bank will make all efforts to get to its 4% target but has said El Nino has emerged as a challenge.
Striking a hawkish note, Das said, “Our job is only half done, having brought inflation within the target band. Our fight against inflation is not yet over. We need to undertake a forward-looking assessment of the evolving inflation-growth outlook and stand ready to act, if the situation so warrants.” He added that price stability and financial stability are mutually reinforcing and necessitate greater policy focus, according to the minutes of the monetary policy panel meeting.
S&P also said Asian emerging market economies remain among the fastest growing ones in its global growth outlook through 2026. India, Vietnam, and the Philippines continue to lead, with average growth of 6.7%, 6.6%, and 6.1% in 2023-2026, according to the agency. It said across the region, robust domestic demand dampened the external drag on overall growth.
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