New Delhi. Economic Affairs Secretary Ajay Seth said on Thursday that the 50 basis point cut in policy rates by the US Federal Reserve will not have any significant impact on foreign investment in India. He said that the Federal Reserve has done what it thinks is good for its economy. However, the RBI will take a decision on cutting interest rates keeping in mind the Indian economy.

Speaking to the media, Seth said, "The reduction in interest rates by the Federal Reserve is a good step for the Indian economy as well as the global economy. A 50 basis point reduction in the high level of interest rates does not seem to have any significant impact on foreign investment in India. We will have to see how other economies behave."

Late on Wednesday, the Federal Open Market Committee voted to cut policy rates by 50 basis points from 5.25-5.50 percent to 4.75-5.0 percent, although experts had expected a cut of half that. The US central bank had kept interest rates at a more than two-decade high for 14 months.

The special thing is that the decision to cut interest rates by the Federal Reserve has been taken before the RBI MPC meeting to be held between October 7 and 9. When Seth was asked whether the RBI will start cutting interest rates, he said that the MPC's decision will depend on what is good for the Indian economy.

He said, 'As far as the Fed's interest rate cut is concerned, one should not pay much attention to it. However, economists do not expect the central bank to take any step to reduce the repo rate.' The RBI has kept the repo rate unchanged at 6.50 percent since February 2023 to rein in inflation. According to the latest data, gross retail inflation in August remained below the central bank's target of four percent for the second consecutive month at 3.65 percent.