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RBI MPC Meet 2024: Repo Rate Unchanged at 6.5%, GDP Growth Forecast Raised

Takeaways and Industry Reactions on RBI MPC Meet 2024

The Reserve Bank of India (RBI) has left its benchmark interest rate unchanged at 6.5%, marking the eighth consecutive meeting with no change. This decision was expected as the RBI continues to focus on controlling inflation amid ongoing policy uncertainty following recent election results.

RBI Governor Shaktikanta Das announced the Monetary Policy Committee (MPC) decisions after a three-day meeting in Mumbai. Key highlights from the meeting include:

Inflation and Growth Projections:

  • Retail inflation reached an 11-month low in April 2024 at 4.83%, remaining within the RBI’s tolerance band of 2-6%.
  • The GDP growth forecast for FY25 has been raised from 7% to 7.2%, reflecting robust economic momentum.
  • The inflation projection for FY25 is retained at 4.5%, with quarterly estimates provided: Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.

Policy Decisions and Statements:

  • The MPC decided by a 4:2 majority to keep the policy repo rate unchanged at 6.5%. Consequently, the standing deposit facility (SDF) rate remains at 6.25%, and the marginal standing facility (MSF) rate and the bank rate at 6.75%.
  • The RBI emphasized the need to remain vigilant against potential inflation risks, particularly from food prices, despite the favorable balance between inflation and growth.
  • The central bank will continue its ‘withdrawal of accommodation’ stance to ensure the anchoring of inflation expectations.

Additional Announcements:

  • Rationalization of guidelines for export and import of goods and services under the Foreign Exchange Management Act (FEMA).
  • Launch of the next edition of Harbinger 2024, a global hackathon with themes focusing on zero fraud and being divyang-friendly.
  • Introduction of auto replenishment for UPI-Lite wallets.
  • A significant surge in Foreign Portfolio Investor (FPI) flows during FY24, with an inflow of $41.6 billion.
  • Forex reserves reached a historical high of $651.5 billion as of May 31.

Market and Economic Impact:

  • The Sensex jumped 600 points following the announcement of the raised GDP growth forecast for FY25.
  • The RBI transferred a record dividend of ₹2.1 lakh crore to the government for FY24, driven by exceptional interest earnings from its foreign investments.

Industry Reactions:


Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd. said,
 “The Reserve Bank of India (RBI) has maintained steady interest rates for the eighth consecutive time, likely influenced by high food inflation despite the overall Consumer Price Index (CPI) remaining within the target range. Provisional GDP growth for FY24 stands at an impressive 8.2%, up from 7% in FY23, further supporting this decision. Additionally, the combined Index of eight core industries (ICI) recorded a provisional growth of 6.2% in April 2024 compared to April 2023, reflecting increased production in key industries.

Economists predict that if inflation continues to decline, rate cuts of 25-50 basis points could be expected in the second half of the fiscal year. Such a reduction in interest rates could significantly boost the real estate sector, which is already benefiting from strong end-user demand. We anticipate this robust demand trend to remain healthy over the coming years, particularly in cities like Gurugram, which are experiencing substantial infrastructure development.”

Mr. Santosh Agarwal, CFO and Executive Director said, “Alphacorp expressed support for the RBI’s decision to maintain the repo rate at 6.5%, highlighting its role in fostering economic stability essential for real estate growth. This stability aids in managing borrowing costs, benefiting home buyers with predictable loan rates and stable EMIs, thus making homeownership more accessible. Investors can also expect steady returns, boosting confidence in the real estate market. Developers will benefit from stable borrowing costs, enabling efficient project completion and a steady supply of residential and commercial spaces. Going forward, we plan to expand our projects to meet the rising demand. The current monetary policy and economic growth create favourable conditions for ongoing development in construction and real estate, aligning with our goal of providing high-quality spaces that meet customer requirements.”

Mr. Yashank Wason, Managing Director, Royal Green Realty said, “We hail the decision of RBI MPC meeting to hold the benchmark rate at 6.5 percent for the eighth consecutive policy review. Maintaining the status quo augurs well for India’s growing economy. This move will keep the momentum of real estate going on. Housing sales across the country, including Delhi NCR, have been phenomenal in the last few quarters. The unchanged repo rate will boost the confidence of homebuyers to purchase properties and give breathers to home loan borrowers. The consistent stand of RBI will give stability to the real estate sector and its growth will significantly add traction to the country’s growing GDP and promising future prospects.”

Mr. Vipin Sharma, Founder & Chairman, Aarize Group said, The Reserve Bank of India has decided to keep the repo rate at 6.5% during its monetary policy, which will benefit the real estate sector. We believe that India’s growth at 8.2% in FY 2023-24 is an outcome of the initiatives made for Viksit Bharat by 2047; the growth trajectory is predicted to continue and strengthen in the future. This stability in loan rates promotes current and future real estate investments, hence improving sector growth. Therefore, we are committed to use this growth boost to meet the increasing demand for residential and commercial spaces.

Mr. Manish Jaiswal, Group COO, Eldeco said, With the RBI maintaining the repo rate at 6.5%, we strongly support this prudent decision by the government. This stability is crucial as it ensures consistent borrowing costs, encouraging more homebuyers and investors into the market. The robust GDP growth projection of 6.5% further boosts our confidence in expanding our projects to meet the increasing demand for residential and commercial spaces.

Mr. Abhishek Trehan, Executive Director, Trehan Iris, said, “The RBI’s decision to keep the repo rate at 6.5% is expected to bring stability to the real estate sector, creating a favorable environment for growth. This move aims to bolster the sector’s momentum, potentially increasing demand for housing, especially luxury properties. As India’s economy continues to grow, the real estate sector is positioned to have a significant impact on the country’s development, and the RBI’s repo rate policy will play a crucial role in driving that growth forward.”

Mr. Ashish Agarwal, Director, AU Real Estate, said – The RBI’s decision to maintain the repo rate unchanged is a thoughtful move that will have a lasting impact on the real estate sector. This stability in interest rates will make homeownership more attainable and affordable for buyers, which in turn will drive demand for luxury housing. As India’s economy continues its upward trajectory, the real estate sector is poised to play a pivotal role, and this repo rate policy will be a crucial catalyst in propelling that growth forward.

Mr. S K  Narvar, Group Chairman, Trident Realty, said – The RBI’s decision to keep the repo rate unchanged is a strategic move that will help maintain the momentum in the real estate sector. This stability will enable homebuyers to make informed decisions, driving demand for luxury housing and contributing to the country’s economic growth. The current economic environment, characterized by a stable inflation rate and robust GDP growth, provides a favorable backdrop for the real estate sector. The RBI’s decision to maintain the status quo will ensure that the sector continues to benefit from these favorable conditions, driving growth and creating new opportunities for homebuyers and investors alike.

Mr. Ankush Kaul, chief business officer – Ambience Group said, ““RBI has maintained the repo rate at 6.5 per cent for the last 16 months. This rate has been kept in mind by the real estate sector for a long time. There is a distinct excitement and confidence among potential buyers, which will encourage buyers to invest in both residential and commercial sectors as the festive season approaches.”

Mr. Ashwinder R. Singh, Co-Chair of CII’s NR Committee on Real Estate, CEO Residential at Bhartiya Urban, and Author said, “The RBI’s decision to maintain the repo rate at 6.50% is a strategically sound move that reinforces stability and confidence in the real estate market. This policy stance not only sustains the current growth trajectory but also enhances affordability for potential homebuyers and commercial real estate investors. By keeping interest rates steady, the RBI ensures that financial burdens on borrowers remain manageable, thereby encouraging more investments and purchases. This is expected to drive positive demand, bolster market sentiment, and support long-term growth in the sector.”

Mr. Dharmendra Raichura – VP & Head of Finance at Ashar Group said, “The Reserve Bank of India’s decision to maintain the repo rate at 6.5% reflects its commitment to controlling inflation while supporting economic growth. Although the unchanged rate is industry-agnostic, the real estate sector anticipates lower interest rates later this year, which could provide an impetus for housing demand and sectoral growth across industries. With India’s GDP expanding robustly at 8.4% in Q3 of FY 2023/24, a future rate cut could sustain or accelerate this momentum. Developers and investors can capitalize on the conducive environment, as the residential segment is currently experiencing a bull run, with sales rising to over 74,000 units in Q1 2024. We can further expect a cut of 0.25-0.50% in H2 of FY 2024-25.”

Ms. Manju Yagnik, vice chairperson of Nahar Group and senior vice president of NAREDCO Maharashtra, said – “The RBI’s decision to retain the repo rate at 6.5% for the eighth consecutive time ensures economic stability amid global uncertainty and domestic inflation concerns. This stability supports the real estate market, making housing more affordable and boosting consumer confidence. It enables informed investment decisions, promoting sector growth and contributing to India’s economic prosperity. With GDP growth projected at 7% in FY25 and inflation at 4.5%, the financial environment encourages long-term investments in housing. The recent Lok Sabha elections have further bolstered economic sentiment, enhancing investor confidence through political stability and consistent economic policies.”

Mr. Piyush Bothra, Co-Founder and CFO, Square Yards said, “Interest rates significantly influence consumer sentiments, particularly affecting the majority of buyers in the low-to-mid segment. The current market upcycle is driven by the premium segment, which is relatively less sensitive to minor interest rate changes. Hence, the central bank’s decision to maintain the status quo is a bit disappointing. A reduction in the benchmark rates would have been ideal as it would have given further buoyancy to the real estate market, especially in the low-to-mid segment, and would have helped a lot of first-time home buyers realize their dream of owning a house.


Although the FY25 forecast for economic growth has been upwardly revised to 7.2% from 7%, and inflation is expected to remain within the target band of 2-6%, signaling towards a positive macroeconomic scenario that will buoy the homebuyer sentiments. Given the current outlook, we anticipate the demand momentum to remain strong in property markets across all major cities in India.”

Mr. Shrinivas Rao, FRICS, CEO, Vestian, said, “RBI kept the repo rate stable at 6.5% for the eighth consecutive time on the back of strong growth momentum. It is a welcome move as headline inflation is still above the RBI’s upper limit of 4% despite marginally easing to 4.83% in April 2024 over the previous month. Moreover, the inflation is anticipated to increase in May 2024 due to an increase in the prices of food items amid nationwide heat waves.”

Rao added, “This is probably the last time RBI will maintain status quo. The repo rate may start its descent from the upcoming MPC meeting as higher kharif production is expected amid an above-normal monsoon, easing the prices of food items. Furthermore, this reduction in repo rates may provide respite to the real estate sector and fuel the growth momentum further.”

Mr Ashwin Chadha, CEO, India Sotheby’s International Realty, said, “As expected, the MPC has decided to keep the repo rate unchanged at 6.5%. This decision aligns with the MPC’s calibrated measures to tackle persistent inflation. The RBI has successfully maintained the resilience of the Indian economy, contributing to sustained growth momentum even amidst a challenging global environment.

The good news is that CPI inflation continues to soften, and the GDP growth rate is projected to remain above 7% for all quarters of FY2024-25. Additionally, the monsoon is expected to be favorable, reducing potential risks to the economy.

Given these positive indicators, we anticipate optimistic sentiments to continue, also the upward trend in housing demand, particularly in the high-end and luxury segments, will persist for the foreseeable future.”

Mr Vimal Nadar, Senior Director & Head of Research, Colliers India, said, “In the first MPC meeting after the recently concluded general elections, the RBI has maintained status quo. The repo rate remains at 6.5% and withdrawal of accommodation continues. This decision comes against the backdrop of a concerted effort to contain inflation close to 4% on a durable basis. Furthermore, an upward revision of FY 2025 GDP growth rate projection by 20 bps to 7.2% will fuel business optimism across sectors including real estate.

A stable financing environment will continue to benefit homebuyers and developers in both residential and commercial real estate. As central banks across the world ponder over rate cuts, the timing and pace of such reductions in India will remain a key monitorable and should provide further boost to residential activity in the ongoing fiscal year. Developers & institutional investors in the real estate sector will meanwhile continue to expect continuation of structural reforms and policy support from the incoming Central government.”

Mr. Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution Pvt Ltd said, “We welcome the Reserve Bank of India’s decision to maintain the repo rate, as it brings stability to the economic scenario. The RBI commitment to controlling inflation remains crucial, to maintain growth and resilience.

The revised GDP growth projection, now expected to be between 7.2% and 7.3% for FY25, aligns well for the economy. A robust economy, coupled with stable interest rates, promises to elevate disposable incomes and bolster borrowers confidence.

It appears that the RBI MPC may continue this pause for the next couple of meetings in FY2025, with a focused view on liquidity management.”

Mr. Sorab Agarwal, Executive Director, ACE – Action Construction Equipment Ltd said, ‘’The RBI’s prudent decision to keep the repo rate unchanged at 6.5 percent for the eighth consecutive policy review is an understandable step. Maintaining the status quo will ensure sustainability in the infrastructure and construction equipment manufacturing sectors. A stable repo rate benefits the lending business of banks, creating a conducive environment for increased demand in the engineering and manufacturing sectors. We can expect monetary easing in the coming quarters, supporting lower interest rates and credit demand which can further fuel the economic growth of the country. As the equipment manufacturing sector expands, we are well-positioned to meet market demand, playing a central role in India’s journey to becoming the third-largest economy.’’

Mr. Sanjay Kumar Sinha, Founder and Managing Director, Chaitanya Projects Consultancy said, “As anticipated, the RBI continues to keep the repo rate at 6.5%.However, the infrastructure industry and the economy at large would might have expected a rate cut, considering the significant growth in India’s GDP which now stands at 8.2%, also the current macro-economic parameters are favourable and the rate has been maintained at 6.5% for over a year now. This move will foster the confidence of Infrastructure, EPC (engineering, procurement, and construction) and real estate companies, which are primarily dependent on debt. Further, it indicates a stable economic environment, which can attract more private investment into infrastructure & continued support from the government.”

Cover image- livemint.com

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