Reserve Bank of India Governor Shaktikanta Das on Friday ruled out any interest rate cuts in the near term, saying that the central bank's primary focus is to bring down inflation to its target of 4%.
"Interest rate cuts are not on our agenda at this point," Das said in an interview with Bloomberg TV. "Our primary focus is to bring down inflation to 4%."
Das said that the RBI's primary objective is to bring down inflation to 4%. "We are on a path to bring down inflation to 4%," he said. "Until inflation reaches 4%, it would be pointless to talk about a rate cut."
The RBI raised interest rates by 0.40 percentage points in May 2022 to 4.90%. This was the first rate hike by the RBI in four years.
Das said that the RBI is closely monitoring the impact of the Russia-Ukraine war on the Indian economy. "The war has caused a lot of uncertainty," he said. "We are closely monitoring the situation and will take appropriate action as needed."
Goldman Sachs economists believe that the RBI will start cutting rates in the third quarter of 2024. The RBI's decision to not cut rates is a blow to borrowers, who were hoping that interest rates would come down. However, the decision is in line with the RBI's focus on bringing down inflation.