RBI's decision to maintain repo rate welcomed

The recent decision by the Reserve Bank of India (RBI) not to hike the repo rate unchanged has been met with appreciation.

While the current rate of 6.5 per cent is at its highest in four years and impacts affordable housing, the momentum gained by the realty sector, especially in premium and luxury segments, is expected to remain largely unaffected. As the real estate sector significantly contributes to the country’s GDP, stakeholders hope for rate reductions in the next meeting to stimulate the sector’s growth further. The governor of the Reserve Bank of India (RBI) has stated that they anticipate the GDP growth for the initial fiscal of FY2024 to be around 8 per cent. Following this, they expect growth to be approximately 6.5 per cent in Q2, 6 per cent in Q3, and 5.7 per cent in Q4. The RBI has maintained its projection for the entire fiscal year of 2023-24, expecting the GDP growth to remain at 6.5 per cent.

The Reserve Bank of India (RBI) has chosen not to raise rates for the second time. Initially, the central bank halted the rate hike process during its April monetary policy committee (MPC) meeting. This decision is based on the significant decline observed in the trajectory of Consumer Price Index (CPI) inflation.