Finance Minister P Chidambaram, on Thursday, said it was too too early to assess the impact of the US Fed rate cut on inflation and rupee appreciation.
“It is too early to make any assessment of likely impact of the interest cut by the US Federal Reserve,” he told reporters here. Mr Chidambaram also said, “This cut in interest rate is on expected tile. This has already been factored in by the Reserve Bank of India (RBI) in its mid-year review of the Monetary Policy.”
The US Federal Reserve, on Wednesday, announced a 0.25 per cent cut in benchmark interest rate, which is expected to increase capital flow from Foreign Institutional Investors (FIIs) in the Indian stock market.
It is because foreign investors will be finding it more profitable to park their funds in Indian stock markets, which are comparatively giving better returns.
As per data, the FIIs have pumped in more than $3 billion in Indian markets after the US ratecut, at which banks borrow from the US Central Bank, by 0.5 per cent on September 18.
