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Perspective on RBI MPC Policy Announcement by Nitin Bavisi, CFO, Ajmera Realty and Infra India Ltd.

“The RBI today increased the repo rate by 50 bps bringing the policy rate back to pre-pandemic levels, highest since August 2019. The quantum of the rate hike was on the upper end of the market expectations. RBI retaining its GDP estimate for FY23 at 7.2% illustrates the relatively strong macro fundamentals of the Indian economy compared to advanced economies in the world. 

What is important to note is that the inflation trajectory is expected to move below 6% by the fourth quarter of FY23. This augurs well for the consumption-led growth of the Indian economy in the long term. Though in the medium term, the inflation trajectory is expected to be above 6% in the second and third quarters of this fiscal year.  RBI will continue its path of accommodation stance withdrawal to safeguard macro economic framework against the keep the inflationary pressures.”

From the current perspective of the real estate developers, the input costs will continue to receive inflationary pressure in the medium term. Even after taking today’s rate revision in account, revised home loans are still expected to remain marginally lower than the pre-pandemic levels which augur well in sustaining the demand momentum for the residential sector.”

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