The Reserve Bank of India’s Monetary Policy Committee (MPC) announced on Friday that it would maintain the lending rate, also known as the Repo rate, at 6.5% for the seventh consecutive time. The Repo rate, set by the RBI, represents the rate at which it lends money to commercial banks. This decision underscores the RBI’s stance on monetary policy, signaling continuity in its efforts to manage inflationary pressures, stimulate economic growth, and maintain stability in the financial system.
RBI Governor Shaktikanta Das announced on Friday, April 5, expressing concern about inflation, that the central bank would maintain the Repo rate at 6.5%. The Repo rate signifies the cost at which RBI lends money to commercial banks, ultimately impacting the interest rates at which citizens borrow from banks. For homebuyers, the decision to keep the Repo rate stable is good news, as it suggests that there will be no sudden increase in their Equated Monthly Installments (EMIs). This stability in borrowing costs provides a sense of relief for those in the housing market, fostering predictability in their financial commitments amidst economic uncertainties.
Anuj Puri the Chairman of ANAROCK Group said
Aptly and as expected, the RBI has kept the repo rates unchanged at 6.5%. The Indian economy is going strong and inflation is reined in, though it has yet to come within the threshold of RBI’s target. The decision to maintain status quo will keep the ongoing residential real estate sales momentum on course and unimpeded. Aspiring homebuyers eyeing a purchase will proceed with confidence. Housing sales across the top 7 cities have been phenomenal in the last few quarters, even though prices are rising steadily. As per ANAROCK Research, we saw total housing sales of over 1.30 lakh units across the top 7 cities in Q1 2024 – the highest quarterly sales in the last decade. Average residential prices across these cities have seen a significant jump in the last one year – ranging between 10-32% in Q1 2024 when compared to Q1 2023. Thus, the breather which RBI’s unchanged repo rate will provide to home loan borrowers is apt and welcome.
