US Fed Rate Cut May Not Impact Indian Foreign Inflows, Says Economic Affairs Secretary

Economic Affairs Secretary Ajay Seth stated that the US Fed's 50 basis points rate cut will unlikely affect foreign inflows into India. Despite the US Federal Reserve's decision, the RBI will consider India's economic conditions to make its rate cut decision. The RBI maintains the repo rate at 6.50% to control inflation.

The recent 50 basis points rate cut by the US Federal Reserve is unlikely to significantly influence foreign inflows into India, according to Economic Affairs Secretary Ajay Seth.

Seth emphasized that while the US Federal Reserve's decision is beneficial globally, the Reserve Bank of India (RBI) will take into account India's economic context to determine its interest rate policy.

The RBI has kept its repo rate unchanged at 6.50% since February 2023 to manage inflation, with headline retail inflation in August falling below the central bank's target for the second consecutive month, recorded at 3.65%.

(With inputs from agencies.)