The Reserve Bank of India (RBI) announced its decision on the repo rate on Friday, April 5th, and kept it unchanged at 6.5%. It is noteworthy that this is the 7th time the repo rate has remained unchanged. Additionally, the RBI projected India’s real GDP growth to be around 7% for the fiscal year 2025. By maintaining the repo rate at 6.5% since February 2023, the RBI’s decision is expected to further boost the real estate sector and domestic sales in the country. Let me explain to you the expert opinions on this matter.
GDP Growth Projection of 7%
RBI Governor Shaktikanta Das stated that based on the expectations of a normal monsoon, easing inflationary pressures, and continued momentum in the manufacturing and services sectors, the RBI has projected GDP growth at 7% for the fiscal year 2024-25. It is estimated that GDP growth in the first quarter will be 7.1%, 6.9% in the second quarter, 7% in the third quarter, and 7% in the fourth quarter as well.
Foreign Exchange Reserves at an All-Time High
The RBI Governor mentioned that India’s foreign exchange reserves stood at an all-time high of $645.6 billion as of March 29th. Many economists believe that this is a result of the Modi government’s strong policies, which have enabled India’s economy to progress rapidly.
A Positive Signal for the Real Estate Sector
The RBI’s Monetary Policy Committee did not make any changes to the policy rates during its April meeting, in line with market expectations. This move toward maintaining stability in lending rates is a positive signal for the real estate sector, which has been experiencing steady growth. Let me share with you the expert opinions on this matter.
According to Pradeep Aggarwal, Founder and Chairman of Signature Global (India) Limited, “The RBI has taken a commendable initiative by keeping the repo rate unchanged for the seventh consecutive time. A stable repo rate will instill confidence and trust among home buyers. Undoubtedly, this stability will have a positive impact on the growth of the real estate sector.”
Manoj Gaur, CMD of Gaur Group and Chairman of CREDAI NCR, stated, “The RBI’s decision is a highly commendable step. Along with the continuous robust performance of the Indian economy, the decision to keep the repo rate unchanged for the seventh consecutive time will be a positive signal for the real estate sector. The inflation figures are still a cause for some concern. This is a well-balanced decision by the RBI. We hope that this step will help India rein in inflation, after which we will see the country transition to a low-interest rate regime. Additionally, the affordable housing segment, which has been a concern, requires relief in the form of a repo rate cut.”
Kushagr Ansal, Director of Ansal Housing, expressed his delight, saying, “The RBI’s decision to maintain the repo rate at 6.5% is expected to bring a positive rise in the housing market. Despite rising housing expenses, unchanged home loan rates will provide some relief to potential home buyers, boosting confidence and investment in the sector. The RBI’s decision is poised to encourage the launch of new projects and further development in emerging sectors of interest.”
Will the Home Loan EMI Burden Increase or Decrease?
The RBI’s MPC decided to keep the repo rate unchanged at 6.50% on April 5, 2024. This means that there will be no immediate impact on real estate or home loan EMIs. Since there is no change in the repo rate, banks are unlikely to adjust their lending rates promptly. This implies that your EMI will remain the same for now. It is crucial to note that the RBI’s decision may influence banks’ future actions regarding interest rates.
