RBI should hold repo rate, reduction in rate in near future preferable: Industry

Chennai, Oct 4 (IANS) The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is expected to retain the repo rate at the current level though a reduction in the rate in the near future is preferable, said officials in the real estate and financial services sectors.

The three-day meeting of the MPC is being held on October 4-6. The decision of the MPC will be announced by the RBI Governor, Shaktikanta Das on October 6.

“The economy is looking robust with high investments across businesses in recent times. A recovery in property prices and rise in yields has made investment in residential properties attractive yet again and has been responsible for continued demand in the sector,” said Ramani Sastri, Chairman and Managing Director.

Sastri said the long-term benefits of owning a home have led to sustainable growth in the segment.

“Hence, we expect a continuation of existing policy rates through 2023 and undoubtedly, a further reduction in interest rates in the near future would be preferred to bolster overall market confidence and make it more enticing for home buyers,” Sastri remarked.

According to him, the market continues to experience end user-driven demand and we are already witnessing a trend of more serious buyers closing sales.

“The forthcoming monetary policy meeting unfolds against a backdrop of cautious optimism. We anticipate the RBI will maintain rate stability, offering promising prospects for borrowers, particularly those contemplating home loans,” Kaushik Mehta, Founder & CEO of RUloans Distribution.

According to Mehta, the trajectory of the home loan market in the forthcoming year hinges on economic dynamics and consumer sentiment.

“If rate stability persists and the economy maintains its positive momentum, we may witness a surge in home loan applications, especially towards year-end, further fuelled by the festive season. Diligent monitoring of economic indicators and central bank actions remains vital for both borrowers and lenders,” Mehta said.

In a report, CARE Ratings said the RBI is likely to prioritise supporting economic growth, especially during the festive season, while remaining cautious about inflation.

“We anticipate that the RBI will keep its policy rates unchanged with a unanimous decision while adhering to its stance of ‘withdrawal of accommodation.’ We do not anticipate any further rate hikes by the RBI in this fiscal year,” CARE Ratings said.

–IANS

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