Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said until the 4 per cent inflation target is achieved on a durable basis, it would be premature to talk about cuts in the repo rate – the key policy rate.
In an interview to Bloomberg in Davos, Das said consumer price index (CPI) inflation has moderated from a peak of 7.8 per cent immediately after the onset of the Ukraine-Russia war and has come within the RBI’s target range of 2-6 per cent.
“Unless we reach 4 per cent (inflation target), and see clear evidence that it (inflation) is going to sustain at that level, it would be really premature to talk about rate cuts. At the moment, the topic of rate cuts is not on our table. It is not even under discussion,” Das said when asked if there was a possibility of a rate cut in the second half of 2024. He said the average inflation is expected to be at 4.5 per cent in financial year 2024-25 (FY25). The RBI’s focus is to remain actively disinflationary and to bring CPI inflation to 4 per cent on a sustainable basis.
When asked if there would be no rate cuts in 2024, Das stated that it would depend on many factors but he would not like to give any forward-looking statement.
