Muted Impact of US Federal Reserve Rate Cut on India: Insights from Experts

Chief Economic Advisor V Anantha Nageswaran stated that the recent US Federal Reserve rate cut's impact on India would be muted since it was anticipated. He noted that Indian markets are already drawing investor interest. Economic Affairs Secretary Ajay Seth echoed this, suggesting minimal impact on foreign inflows.

The impact of the US Federal Reserve's decision to slash the benchmark interest rate is expected to be muted for India, according to Chief Economic Advisor V Anantha Nageswaran. Speaking on Thursday, he noted that this move was largely anticipated by the markets.

Nageswaran stated that the Indian stock market has already been drawing significant investor interest, framing the rate cut as a broadly positive development for emerging markets. ''The impact on India will be little muted... much of it (rate cut) priced in,'' he remarked at Deloitte's Government Summit 2024.

The US Federal Open Market Committee had earlier voted to reduce the federal funds rate target range by 50 basis points, a decision that took many analysts by surprise. Economic Affairs Secretary Ajay Seth added that the rate cut is unlikely to significantly impact foreign inflows into India.

(With inputs from agencies.)