Reserve Bank of India Governor Shaktikanta Das stated that interest rate cuts won t be considered unless inflation firmly stabilises around the 4% target. Das emphasized that the topic of rate cuts is not even under discussion, highlighting the need for clear evidence of sustained low inflation. The central bank has maintained unchanged rates for five consecutive policy meetings, maintaining a relatively hawkish stance amid inflation above the target. Economists anticipate potential rate cuts later in the year following actions by the Federal Reserve.
India Business News: Morgan Stanley warns that if oil prices remain at $110 a barrel, it could destabilize India's economy and force the central bank to raise interest rat
The worrying geopolitical situation in Europe and the Middle East has created uncertainty in financial markets. Concerns over potential spikes in oil prices are growing, and this could prompt the Reserve Bank of India to take action on interest rates. India, a net oil importer, has a positive long-term outlook, but if oil prices top $110/bbl, it could strain India s economic stability and currency value, analysts say.
During the Covid crisis, governments and central banks slashed interest rates and pumped in huge amounts of money to revive their economies. But as activity resumed and pent-up demand burst out, the excess money caused high inflation, which has stubbornly refused to return to official targets.