Interest Rate Announcements by RBI and Shaktikanta Das’s Recent Comments
The interest rate announcements by the Reserve Bank of India (RBI) at the beginning of each month are crucial for everyone, from the Mumbai Stock Exchange to the common borrower. The RBI’s decisions to cut or raise interest rates can significantly impact the market, either positively or negatively. Conversely, market developments also influence the RBI’s interest rate policy. Recently, RBI Governor Shaktikanta Das made a significant statement regarding inflation and hinted at future interest rate policies.
What Did Shaktikanta Das Say?
RBI Governor Shaktikanta Das was the Chief Guest at the Future of Finance Forum 2024 on Friday. During his address, he commented on inflation and potential interest rate policies in India. “Inflation in the country was at its highest in April 2022 at 7.8%. It is now within the target band of 2 to 6 percent. However, our goal is to bring the inflation rate down to around 4 percent. We still have a long way to go,” said Shaktikanta Das.
He also noted, “In recent policy meetings, we have consistently maintained our current stance. We are avoiding making decisions based on sudden drops or increases in inflation numbers.”
Interest Rates Unchanged for 18 Months
Given the statements by RBI Governor Shaktikanta Das, it is anticipated that the RBI may keep the interest rates unchanged for the rest of the year. The RBI has not altered interest rates for the past 18 months. Economists believe that the RBI is unlikely to make any changes until the last quarter of the financial year.
During the COVID-19 period, like many global economies, India’s economy faced significant challenges. However, Shaktikanta Das highlighted that the Indian economy has rebounded strongly, maintaining an average GDP growth of 8% between 2021 and 2024. Additionally, the RBI has projected a growth rate of 7.2% for the financial year 2024-25.
