Fitch says RBI rate cut to have minimal credit impact

Fitch, the global ratings agency, said that the interest rate cut by the Reserve Bank of India will have minimal credit impact.

It said, achieving a credible, low inflation environment is a key factor for the country.

Citing that falling commodity, food prices and gradual decline in long-term inflation expectations had created a more benign inflationary environment, Fitch said, "The extent to which the rate cut would have a long-term positive effect on bank asset quality remains uncertain."

The country's high public debt burden and deficit have been a long-standing key weakness for its sovereign credit profile, the ratings agency added.

(Reuters)