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 Below the perspective on RBI MPC Announcement by Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India 

“We are delighted that RBI has maintained the REPO rate pause for the third consecutive instance. The choice to maintain the status quo is supported by strong economic condition and the revised inflation forecast for FY24 falling within the central bank's upper tolerance range of 6%. However, the central bank remains watchful on inflationary expectations and is focused on bringing the inflation level to its 4% target. Measures to reduce excess liquidity, with temporary tightening through incremental Cash Reserve Ratio at 10%, aligns with price stability goals of the central bank. Maintaining policy rates will bolster consumer demand amid moderate inflation, further promoting economic growth. This stance will likely boost homebuyers’ confidence as affordability remains stable. Since the interest rate upcycle, the repo rate has been hiked by 250bps, resulting in 160bps rise in home loan rates. We remain cautious about the housing market, especially the affordable and the mid segment that is price sensitive and has seen some impact of the previous rate hikes. However, a long pause in the policy rate will be supportive to the housing market.

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