Perspective on RBI MPC Meeting by Mr. Shishir Baijal, Chairman and Managing Director, Knight Frank India
Below the Perspective on RBI MPC Meeting by Mr. Shishir Baijal, Chairman and Managing Director, Knight Frank India
“We welcome new Governor Sanjay Malhotra and congratulate him on his first Monetary Policy Announcement. We are glad to hear the Monetary Policy Committee’s decision to The RBI's decision to cut the repo rate by 25 basis points to 6.25% aims to stimulate economic growth amid expectations of easing inflation. The recent budget has also played a crucial role in managing inflation by focusing on fiscal discipline and targeted spending. This as well enabled the RBI to manoeuvre a rate cut.
For the real estate market, lower borrowing costs are expected to boost demand for home loans, making housing more affordable and stimulating sector growth. This is a positive development for both homebuyers and developers, potentially leading to increased sales and new project launches. We hope interest rate cuts will be passed on to consumer and the home loan rates become more attractive which combined with the earlier announced tax incentives spur residential demand across the different price brackets, but especially in the below INR 50 Lakh category, which has seen continued weakening of demand.
This rate cut, the first one since May 2020, is likely to support slowing economic growth by boosting consumption and investment. Increased liquidity in the banking system will help address market constraints, benefiting sectors like infrastructure and housing.
Overall, the RBI's rate cut is a balanced approach to supporting growth while managing inflation and liquidity concerns, though the central bank must remain vigilant about the impact of the depreciating rupee.”
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