The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on Friday announced the decision to keep the repo rate unchanged at 6.50 per cent for the fifth consecutive time. The six-member rate-setting panel decided unanimously to keep repo rate unchanged for the fifth time cumulatively after increasing it by 250 bps from May 2022 to December 2022.
The RBI MPC also left the policy stance unchanged with focus on withdrawal of accommodation.
This is in line with what experts, including State Bank of India had predicted for the policy rate. Ex-SBI chief Rajnish Singh had also said, before the MPC announcements, that the RBI is likely to maintain status quo as there was no possibility of a rate cut as well as no reason for an increase in rates.
The Indian economy presents a picture of resilience and momentum amid global uncertainties, said Shaktikanta Das. “The fundamentals of the Indian economy remains strong, with banks and corporates showing healthier balance sheets, fiscal consolidation on course, external balance remaining imminently manageable, the forex reserves providing cushion against external shocks,” said Das.
Anuj Puri, Chairman, ANAROCK Group, said that stable repo rates will help homebuyers. “With the fundamentals of the Indian economy remaining strong and the recently announced GDP rates indicating positive outlook, the RBI once again decided to keep the repo rates unchanged. This is an extension of the festive bonanza that RBI gave to the homebuyers in its last policy announcement. It gives homebuyers yet another opportunity to make cost-optimized home purchases. If we consider the present trends, the housing market is on a bull run and unchanged home loan rates will only add to the overall positive consumer sentiments. Additionally, given that housing prices have escalated across the top 7 cities in the last one year, at least the unchanged home loan rates will give some relief to the homebuyers.”
Adhil Shetty, CEO of Bankbazaar.com, said, “Repo rates wield significant influence over the interest rates set by banks for various loans, including home loans. Changes in the repo rate directly impact these loan interest rates. With the current repo rate holding steady at 6.5 per cent, existing borrowers can rest assured that their Equated Monthly Instalments (EMIs) won't be immediately affected. Prospective homebuyers may find relief in the stable repo rate, allowing them to plan their moves without the imminent threat of rate hikes. This stability is likely to bolster sentiments in the real estate sector, which is already experiencing positive trends in key markets across the country.”