Publish Date: December 11, 2023
The Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) has retained the key policy repo rate at 6.5% through a unanimous decision. This is the fifth meeting at a go in which the MPC decided to maintain the status quo on the repo rate.
Earlier, the MPC raised the repo rate by 25 basis points (bps) to 6.5% at its meeting in February 2023. It was widely anticipated that the central bank would continue to retain the repo rate at 6.5%.
Experts say that today’s RBI monetary policy decision to maintain the repo rate at 6.5% reinforces stability in the economic backdrop.
With the fundamentals of the Indian economy remaining strong and the recently announced Gross Domestic Product (GDP) rates indicating a positive outlook, the central bank once again decided to keep the repo rates unchanged.
This move remains an extension of the festive bonanza RBI offered the homebuyers in its last policy announcement in February 2023. It will provide homebuyers one more opportunity to make cost-optimized home purchases.
Going by the present trends, the housing market is on a positive growth trajectory, and unchanged home loan rates will only add to the overall positive consumer sentiments, point out experts.
In addition, given that housing prices have escalated across the top seven cities in the last one year, at least the unchanged home loan rates will give some relief to the homebuyers.
The housing prices have witnessed an uptick anywhere between 8-18% across the top seven cities in the last one year. The current average prices in the top seven cities stood at about Rs 6,800 per sq. ft. as compared to 2022, when it stood at nearly Rs 6,105 per sq. ft., thus increasing by 11% collectively in the top seven cities.
In the near future, experts feel that the momentum in housing sales will continue. Because of the unchanged repo rates coupled with the resultant stable home loan rates and positive economic outlook for the country. This is interpreted as a call for strategic resilience.
While the unchanged repo rate signals continuity, it also challenges the developer community to innovate within this environment. This steadiness allows for thoughtful planning and execution of growth strategies.
Overall, experts point out that this decision has to be viewed not just as a monetary measure but as an impetus for strategic foresight, responsible leadership, and the pursuit of sustainable success.