Monday, October 28, 2024
Advertisement
  1. You Are At:
  2. News
  3. Business
  4. RBI unlikely to cut rates amid strong economic growth, says SBI report

RBI unlikely to cut rates amid strong economic growth, says SBI report

The Reserve Bank of India (RBI) is unlikely to announce a rate cut in its upcoming monetary policy meeting, according to a report by the State Bank of India (SBI). With India experiencing robust economic growth that surpasses capacity, the RBI is expected to maintain current interest rates.

Edited By: Nitin Kumar @Niitz1 New Delhi Updated on: October 03, 2024 13:25 IST
State Bank of India (SBI)
Image Source : FILE PHOTO State Bank of India (SBI) branch.

The Reserve Bank of India (RBI) is unlikely to announce a rate cut in its upcoming monetary policy meeting, a State Bank of India (SBI) report said. The report highlighted that India’s strong, above-capacity economic growth strongly supports the case for maintaining current interest rates, as reported y the news agency ANI.

Focus on free thinking

The SBI report suggested that the RBI may not align its interest rate decisions with the growth in the US. Instead, it is likely to take an independent stance that prioritises changing domestic economic conditions over global influences. "Domestic conditions are paramount and with robust growth higher than potential output, case of pause exists," the report said.

"RBI may disassociate from the interest rate developments in the US and may take independent view on the domestic rates based on evolving conditions" the report added.

Effect of credit growth on deposits

Furthermore, the report highlighted the critical relationship between credit and deposits in the Indian banking system. It warned that a decline in loan demand could lead to a decline in savings, making it necessary for credit growth to remain robust to maintain savings levels. Vibrant investment is important, as it creates demand for loans and in turn supports investment growth. 

Rates are expected to remain stable

While some analysts have predicted a possible rate cut due to global growth, the SBI report suggested that continued domestic growth and strong loan demand could force the RBI to continue to cut rates on the snow in a short time. The main focus of the RBI seems to be to maintain the growth of the Indian economy and reduce the impact of external factors.

Also read | Stock market plummets amid Israel-Iran conflict: Sensex drops 1,264 points, Nifty falls 345 points

Advertisement

Read all the Breaking News Live on indiatvnews.com and Get Latest English News & Updates from Business

Advertisement
Advertisement
Advertisement
Advertisement