CREDAI seeks further reduction in next monetary policy meet for stronger impetus to housing demand
Realtors' apex body Confederation of Real Estate Developers' Associations of India (CREDAI) has said that the RBI's decision to cut benchmark lending rate by 25 basis points might have ‘limited direct impact’ and sought further reduction in the next monetary policy meet for ‘stronger impetus’ to housing demand. It said reduction in repo rate may lead to lowering of interest rates on home loans provided banks decide to pass on the benefits.
Commenting on the monetary policy announcement, CREDAI National President Boman Irani said the RBI's decision to reduce repo rate by 25 basis points to 6.25 per cent supplements recent announcements in the Budget aimed at boosting spending and spur economic growth. This supportive monetary policy was ‘imperative’, especially after the recent 50 basis points reduction in Cash Reserve Ratio (CRR), which has already injected significant liquidity into the banking system.
Irani observed while the current cut may have a limited direct impact, he anticipates that a further rate cut in the next MPC meeting will provide stronger impetus to overall demand, accelerating housing sales, particularly in the mid-income and affordable segments. As inflations continues to remain a notch higher than the medium-term target, he said the central bank has its task cut out -- contain inflation, inject liquidity into the banking system and cut repo rate in the coming quarter too.
