The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) declared on Friday that the repo rate will remain steady at 6.50 percent for the fifth time in a row. The six-member rate-setting panel unanimously chose to leave the repo rate steady for the sixth time in a row after boosting it by 250 basis points from May 2022 to December 2022. The RBI MPC likewise maintained its policy stance, focusing on the withdrawal of accommodation.
This was forecast by experts, including the State Bank of India, for the policy rate. Before the MPC pronouncements, ex-SBI chairman Rajnish Singh stated that the RBI is likely to preserve the status quo because there is no chance of a rate drop and no reason for a rate increase.
According to Shaktikanta Das, the Indian economy demonstrates resilience and momentum in the face of global concerns. "The fundamentals of the Indian economy remain strong, with banks and corporates showing healthier balance sheets, fiscal consolidation of course, external balance remaining imminently manageable, the forex reserves providing cushion against external shocks," he stated.
According to Anuj Puri, Chairman of ANAROCK Group, steady repo rates will benefit homeowners. "With the Indian economy's fundamentals remaining strong and recently announced GDP rates indicating a positive outlook, the RBI has decided to keep repo rates unchanged once more." This is an extension of the Christmas bonus that the RBI provided to homebuyers in its most recent policy announcement. It provides another option for homebuyers to make cost-effective house purchases. When current trends are considered, the housing market is on a roll, and unaltered home loan rates will just contribute to the overall favorable consumer feeling. Furthermore, given that housing prices in the top seven cities have risen in the recent year, the unchanged home loan rates will provide some respite to homebuyers."
"Repo rates wield significant influence over the interest rates set by banks for various loans, including home loans," stated Adhil Shetty, CEO of Bankbazaar.com. Changes in the repo rate have an immediate influence on these loan interest rates. Existing borrowers can rest assured that their Equated Monthly Instalments (EMIs) would not be affected immediately because the present repo rate remains stable at 6.5 percent. Prospective homebuyers may take solace in the stable repo rate, which allows them to plan their movements without fear of rate hikes. This stability is anticipated to boost sentiment in the real estate sector, which is already showing signs of improvement in key areas around the country."
