The Reserve Bank of India (RBI) on Thursday kept repo rate unchanged at 6.5%, making it six consecutive Monetary Policy Committee (MPC) meetings in which no change was made to the rate at which RBI lends to other banks.
RBI’s latest MPC meeting, held between February 6 and 8, was its first since last week’s interim budget.
According to HT’s sister publication Mint, the decision will, most likely, have no impact on people’s on loan EMIs. Also, the publication spoke to experts on whether RBI’s decision will impact people’s on loan EMIs. Here’s what they said:
Gunjan Goel, Director, Goel Ganga Developments: “As we move through 2024, RBI rate hikes aim to control inflationary pressures – however, transmission to bank lending rates significantly impacts housing affordability. Developers may need to absorb select rate spikes to sustain housing demand. Though transitory policy moves seem negative, India’s growth story and demographics should buffer real estate over the long term.”
LC Mittal, Director, Motia Group: “The latest MPC meeting has once again highlighted the complex balancing act between managing inflation versus supporting growth. While rate hikes are inevitable to tame rising prices, increased home loan costs over 2024 may deter fence-sitters. However, India’s mortgage penetration remains low by global standards. So while property enquiries could temporarily decline, the secular home ownership demand trend should prevail after this cycle.”
Aman Gupta, Director, RPS Group: “As inflation persists despite earlier rate hikes, further tightening in 2024 seems imminent. However, the transmission of cumulative policy rate moves this year to bank lending rates has been asymmetric so far. We may see a more balanced transmission through 2024. Though this will impact mortgage serviceability, homebuyer sentiments should adapt. With India heading towards a $5 trillion economy, long-term real estate growth drivers remain intact.”
(Views of individual experts)