Fitch: RBI rate cut to have minimal credit impact

Reuters Jan 20 | Updated on January 20, 2015

RBI's surprise decision to cut its policy rate does not have a significant credit impact in the short term, said Fitch Ratings in a statement.

Achieving a credible, low inflation environment is a key factor for India, according to Fitch.

It said falling commodity, food prices, gradual decline in long-term inflation expectations, have created a more benign inflationary environment recently. The extent to which the rate cut would have a long-term positive effect on bank asset quality remained uncertain, Fitch added.

India's high public debt burden and deficit have been a long-standing key weakness for its sovereign credit profile, it said.

Published on January 20, 2015

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