The Reserve Bank of India (RBI) has kept the repo rates unchanged for the sixth time in a row at 6.5 per cent. The repo rate is the rate of interest at which RBI lends to other banks. The decision was made during the three-day RBI’s monetary policy committee which started on Tuesday (February 6-8). The RBI typically conducts six bi-monthly meetings in a financial year, where it decides interest rates, money supply, inflation outlook, and various macroeconomic indicators.
Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das on Thursday said the Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 per cent.
He said MPC will remain watchful of food inflation so that the benefits gained are not frittered away.
This is the first bi-monthly policy following the presentation of Interim Budget 2024 by Finance Minister Nirmala Sitharaman.
With the repo rate being kept unchanged, there is likely to be no impact on loan EMIs.
With the fundamentals of the Indian economy remaining strong despite all global headwinds and inflation well under control, the RBI once again decided to keep the repo rates unchanged at 6.5%, thus extending the festive bonanza that it gave to the homebuyers in its last two policy announcements. Thus, homebuyers retain their advantage of relatively affordable home loan interest rates, said Anuj Puri, Chairman – ANAROCK Group.
If we consider the present trends, the housing market has been unstoppable, and unchanged home loan rates will help maintain the overall positive consumer sentiments. Given that housing prices have risen across the top 7 cities in the last year, this breather by the RBI is a distinct advantage to homebuyers, added Puri.
The rate increase cycle was paused in April last year after six consecutive rate hikes aggregating to 250 basis points since May 2022.
“For India’s real estate sector, this status quo comes as a relief, even if temporary, after facing headwinds from rising home loan costs through 2022,” said LC Mittal, Director, Motia Group.
An unchanged repo rate is a delight for buyers since it gives them another chance to buy real estate at the greatest pricing. “In February 2023, the MPC last increased this rate by 25 basis points, to 6.50%. According to recent data, consumers are doing reasonably well in the housing market, which is consistent with the strong status of the economy. As we approach the new quarter of the season, home sales are trending strongly; the RBI’s decision to maintain current interest rates will be critical in propelling the growth of the residential sector,” said Anurag Goel, Director, Goel Ganga Developments.
“For real estate, the breather from further rate hikes provides temporary respite as home loan rates remain elevated post the cumulative 250 basis points rise last year. As we progress through 2023, the transmission of these cumulative hikes to bank lending rates will accrue more meaningfully, thereby impacting mortgage serviceability and affordability,” said Aman Gupta, Director, RPS Group.
Source By: livemint
