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| Name | No Rate Cut In August: RBI Governor Shaktikanta Das |
| Video Uploader | Video From NEWS9 Live |
| Upload Date | This Video Uploaded At 12-07-2024 13:15:14 |
| Video Discription | One of the key events market watchers are eagerly anticipating is the Reserve Bank of India's policy decision in August. Many expect that India's central bank may soon cut interest rates to further boost the economy, as inflation continues to decline month by month. However, RBI Governor Shaktikanta Das has poured cold water on these hopes. He recently stated that interest rates are likely to stay higher for longer. His comments suggest that the RBI is committed to reducing retail inflation to its target level of 4%, and any talk of a rate cut before achieving this would be premature. Retail inflation in India has been easing for the past five months. However, with vegetable prices once again on the rise, June's CPI print may see a slight uptick to 5%. Prices of tomatoes, onions, and potatoes - staples in every Indian kitchen - surged by double digits last month as extreme heat and heavy floods in India's northern states disrupted agricultural production. And with expectations that food prices will continue to remain a pain point, the RBI may be in no hurry to kickstart monetary easing. Apart from inflation, the RBI is concerned about the adverse impact of monetary easing on deposits. The central bank has expressed worries over bank advances outpacing deposit growth, which remains sluggish. Business updates reported by Indian banks in the first quarter indicate that deposit growth has not picked up much. Cutting interest rates now would further slow down deposit growth. This is because when the RBI lowers rates, banks typically reduce the interest they pay on savings and fixed deposits. As a result, people might find these deposits less attractive and choose other investments with higher returns. This can lead to slower growth in the amount of money people deposit in banks. In the June monetary policy meeting, the rate-setting panel kept the repo rate unchanged at 6.5% for the eighth consecutive time. However, this decision was not unanimous. Two of the six members of the Monetary Policy Committee - Ashima Goyal and Jayanth Varma - voted for reducing the repo rate by 25 basis points and changing the stance from withdrawal of accommodation to neutral. In fact, Varma has been in favor of cutting interest rates since the February meeting, becoming the first MPC member to do so since May 2020. In June, Goyal joined Varma in voting for a rate cut. Both argued that keeping rates higher for longer would hurt growth and impede India from reaching its full potential. Regardless of the dissent, recent statements from the RBI Governor suggest that status quo is likely in the August policy meeting. Experts believe that rate cuts in India may only start in December, or once the US Federal Reserve kickstarts monetary easing. This will help maintain the spread between US and Indian rates and keep Indian debt more attractive to foreign investors vis-a-vis the US. However, if the RBI does not cut rates this year, it would be its longest pause since the MPC started setting rates in 2016. .............................................................................................. News9 is India's first fully integrated English news brand across all digital platforms. It includes a publishing platform, viz. www.news9live.com, a future-ready OTT platform, News9 Plus, and a 24-Hour video streaming service on connected TVs and all social platforms. It's the English news brand that understands and fits perfectly into the digital-first lifestyles of our English news audiences. ► News9 Plus Website : https://www.news9plus.com/all ► News9 Plus App : https://onelink.to/8pwfkc ► News9 OTT Coupons : https://bit.ly/4dwLDx4 ► Watch us on YouTube : https://www.youtube.com/c/NEWS9LIVE ► Like us on Facebook : https://www.facebook.com/news9live ► Follow us on Instagram : https://www.instagram.com/news9live ► Follow us on Twitter : https://twitter.com/NEWS9TWEETS |
| Category | News & Politics |
| Tags | Breaking News | Latest news | News today | Live news update | latest news today | breaking news today | business | No Rate Cut | August | RBI | RBI Governor | Shaktikanta Das | RBI Governor Shaktikanta Das |
