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regular-article-logo Tuesday, 05 November 2024

Finmin sees no impact on fund flow: Government officials and analysts

Economic affairs secretary Ajay Seth said the rate cut, while positive for the global economy, would not significantly affect inflows into India

Our Special Correspondent New Delhi Published 20.09.24, 10:12 AM
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The US Federal Reserve’s decision to cut interest rates by 50 basis points is unlikely to significantly impact India’s foreign inflows, according to government officials and analysts.

Economic affairs secretary Ajay Seth said the rate cut, while positive for the global economy, would not significantly affect inflows into India. “It’s a 50 bps cut from a high level, so I don’t see that making any significant impact on the flows,” he told reporters.

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Chief economic advisor V. Anantha Nageswaran echoed Seth’s sentiment, stating that the impact on India would be “little muted” as the rate cut had been largely priced in. He added that the rate cut positively benefits emerging markets, including India.

Both the benchmark equity indices Sensex and Nifty climbed to fresh record high levels on Thursday though they fell from their peaks.

The 30-share BSE Sensex climbed 236.57 points or 0.29 per cent to settle at an all-time high of 83184.80. During the day, it jumped 825.38 points or 0.99 per cent to scale a new all-time intra-day high of 83773.61 but pared some of the gains at close.

The NSE Nifty gained 38.25 points or 0.15 per cent to 25415.80. During the day, it surged 234.4 points or 0.92 per cent to hit a fresh intra-day record peak of 25611.95

Pradeep Gupta, co-founder, Anand Rathi Group, said from a global perspective, the Fed cut could provide short-term benefits to India, including a stronger rupee and potential capital inflows.

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