India's central bank is likely to delay the rate-cut cycle even further after the Fed's hawkish outlook, according to Taimur Baig.
The RBI's monetary policy committee will meet on Oct. 4, even as fears of rising interest rates returns.
"I don't think the RBI is going to be very concerned if the rate cut cycle gets delayed by a little bit," the Chief Economist and Managing Director of DBS said.
Earlier this month, the U.S. Federal Reserve held its key interest rate steady and signalled that it would remain elevated for longer than expected.
Domestic factors such as food inflation, apart from the Federal Reserve's outlook warning of more rate hikes, are turning out to be a source of headache for central bankers around the world, including the RBI.
Its not just the Fed, domestic factors such as food inflation are also turning out to be a source of headache for the RBI.
"The economy is not dying for monetary easing, and it's not like liquidity is so tight," said Baig.
The Fed's stance is turning out to be a bigger problem for the Indian economy than high crude prices, according to the economist. "We have lived with $100, $110, and even $140 crude rates going all the way back to 2008, and that has not been a spoiler for the global economic cycle. We shouldn't worry that much," he said.
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