When the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) opted to keep the repo rate unchanged at 6.5%, there were huge smiles on the faces of real estate sector stakeholders including home seekers and existing home loan customers.
Explaining the significance of the decision, Y. Viswanatha Gowd, MD & CEO of LIC Housing Finance, said, “Keeping the interest rates steady at 6.5% is in line with the expectations. We expect the same state to continue for a few more quarters. Looking to the lead indicators, it gives optimism and shows demand revival. Monsoon prediction is yet another favorable point. For home buyers, stable interest rate is an encouraging trend.”
Dr. Nitesh Kumar, MD & CEO of Emami Realty, opined, “RBI kept its benchmark policy rate at 6.5% for the second time since it announced a rate pause in April. The report gives an indication of a positive outlook for the Indian economy and indicates that inflation has been kept in check. Since retail inflation has reached an 18-month low, a downward adjustment to the rate was expected; however, a consecutive pause may help manage inflation and ease the pressure on consumers.”
Gurmit Singh Arora, National President, Indian Plumbing Association and Chairman of CII Indian Green Building Council IGBC), explained, “The recent move to keep the repo rate unchanged is on the expected lines. The Indian economic outlook looks promising with most leading agencies predicting a GDP growth rate in the range of 6-7%. The inflation pressure is within control. In April Indian inflation dipped to 4.7%, one of the lowest in the past 18 months. This is a positive sign not just for the economy but also for the real estate and allied industries. A strong economic outlook coupled with lowered inflation will drive growth in consumer spending. Meanwhile, there are threats from international geopolitical tensions and fragile global financial markets. This has led the government to keep the rate unchanged like previous times and further evaluate the situation.”
Nidhi Aggarwal, Founder, SpaceMantra, emphasised, "The rate pause decision and Governor’s commentary can be interpreted as positive for the market. His statement that India’s economic and financial sector remains resilient amidst global headwinds is a testament to the country's strong and improving fundamentals. Today's decision is an indication that the MPC has come to the end of the rate hiking cycle that started in May 2022. If monsoon and agri output remain normal and the global scenario is favourable, the RBI may consider a rate cut by end of 2023. From the stock market perspective, this is a positive development."
