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RBI Monetary Policy FY24 ; Repo rates remains the same, raises inflation estimate

The RBI Monetary Policy Committee has kept the key policy repo rate unchanged at 6.5%. This is the third meeting on the trot that the MPC decided to maintain the status quo on the repo rate. The MPC last raised this rate from 6.25 per cent to 6.50 per cent at its meeting in February. India’s GDP is likely to grow at 6.5% in FY24, said RBI Governor Shaktikanta Das. RBI pegged inflation for FY24 at 5.4%. RBI Governor has said that the Indian economy is the bright spot in the global economy. RBI to allow offline payment of UPI by using near-field communication. The central bank raised the payment limit via UPI lite to Rs 500 from Rs 200.

Industry Expert’s opinion;

1. Mr Ashwin Chadha, CEO, India Sotheby’s International Realty

The RBI has maintained the status quo on key policy rates, highlighting that risks remain evenly balanced. The primary objective is to curb inflation and bring it within the comfortable range of 4%. This strategic move is anticipated to provide substantial impetus to India’s broader growth trajectory. There is an emerging expectation that the RBI might eventually consider a reduction in key interest rates. Once this happens it will be a much-needed breather on EMIs for home loans. It’s noteworthy that the demand for residential real estate has been robust since 2021 on the strength of the economy, jobs and growth.


2. Mr. Mohit Jain, Managing Director, Krisumi Corporation

Differing from the U.S.A and European Central Banks, the RBI chooses to keep the Repo rate unchanged. This strategy is preferred to manage inflation and ease pressure on homebuyers. The period following the pandemic experienced an upswing in home purchases due to pent-up demand, which has since tapered off. To ensure sustained growth, the real estate sector necessitates a stable and predictable interest environment.


3. Mr. Vimal Nadar, Head of Research, Colliers India

In one of the most keenly followed MPC meetings in recent times, RBI has continued to maintain the status quo on benchmark lending rates. While the economic growth trajectory of India remains intact, food inflation and the consequential impact on consumer inflation remains a monitorable. The Central bank has factored in an inflation expectancy of 5.4% for FY 2023-24 in the GDP growth projection of 6.5% for the ongoing fiscal year. Notwithstanding the spiralling effect of the volatile global economic scenario, strong inherent fundamentals of the domestic economy will continue to allay the urgency for rate cuts in near future.

RBI’s decision to keep the repo rate steady at 6.5% since February this year will continue to bring in respite for EMI dependent homebuyers. Stability in financing costs will also stand to benefit the balance sheet of real estate developers. Real estate construction activity remains buoyant and is reflected in healthy steel consumption and cement production. Stable interest rates, favourable pricing & availability of relevant supply will augur well with first time homebuyers especially in the affordable & mid segments in the upcoming festive season.


4. Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.

The RBI’s decision to keep the current interest rates unchanged is a promising step towards easing the financial burden on prospective homebuyers. The surge in monthly EMIs observed over the past few months has considerably constrained the budgets of individuals belonging to the middle and lower-income brackets who aspire to own a home. By maintaining a steady interest rate environment, there is a hopeful projection that these potential buyers will be encouraged to proceed with their home buying plans. This, in turn, is expected to inject a renewed sense of momentum into the affordable and mid-housing home segment, fostering a healthier real estate market and enabling more individuals to achieve their homeownership dreams.


5. Mr. Sunil Dewali, Co-CEO, Andromeda Sales & Distribution

As the RBI maintains a steady stance on interest rates, our outlook is optimistic that the pivotal policy rate has found stability and may potentially decrease in the coming times. This bodes well for homebuyers, developers, and lenders alike. The enduring stability of EMIs, combined with the possibility of forthcoming rate reductions, is set to bolster the confidence of prospective homebuyers. Meanwhile, developers are poised to find relief, as the costs of project funding remain unaltered. This, in turn, is expected to invigorate the initiation of new projects and ignite heightened sales momentum in the upcoming festive season.


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