How will the RBI’s status quo on the repo rate during the festive season affect you? Experts decode | spcilvly

The Reserve Bank of India (RBI), in its fourth bi-monthly monetary policy meeting that concluded today (October 6), kept the repo rate unchanged at 6.5 per cent. The RBI maintained its GDP growth and consumer inflation projections for the current financial year at 6.5 per cent and 5.4 per cent, respectively.

According to CA Manish Mishra, virtual chief financial officer and startup advisor, the RBI’s decision to maintain the status quo on repo rate and inflation provides stability but also indicates a commitment to combat inflation.

Mishra suggests that there will be mixed effects on people during the festive season.

“On the one hand, stable interest rates may help keep borrowing costs under control, possibly encouraging spending. However, the focus on controlling inflation suggests that prices may not see a significant decline, which could affect the purchasing power of consumers,” Mishra said.

Sharing his views on interest rates, Sujan Hajra, Chief Economist and CEO, Anand Rathi Shares and Stock Brokers, said interest rates would be higher for a longer time, which could be negative for common people, as there were some expectations that rate cuts could begin. soon.

Hajra added that this policy is neutral for the ongoing festive season as for most consumer-oriented sectors, this season will be one of the best in a long time.

How would the status quo on rates affect home and car buyers?

The unchanged repo rate would be positive for home and vehicle buyers as the stable repo rate will result in stable interest rates for home loans.

According to Anuj Puri, Chairman, ANAROCK Group, the overall consumer market appears bullish across sectors, particularly the automobile and housing markets, which in many ways reflects the health of the economy.

“We are entering the festive quarter with very strong momentum in home sales, and unchanged interest rates will act as a major catalyst for growth in the residential market,” Puri said.

According to ANAROCK Research, housing sales in the top 7 cities created a new peak in Q3 2023 (despite the generally slow monsoon quarter) and stood at 1,20,280 units as against over 88,230 units sold in Q3. quarter of 2022, thus registering 36 percent annually. growth. “With the stability of the repo rate and the consequent stable interest rates on home loans, we can expect the momentum to continue,” Puri added.

Echoing a similar sentiment, Jaatin Suratwala, CEO and Chairman, Suratwwala Business Group, said that as we approach the festive quarter, the real estate market is showing strong momentum in sales. Unchanged interest rates serve as a crucial catalyst, fostering an environment conducive to growth in the residential sector.

Offering an outlook on a reduction in key rates in the future, Lincoln Bennet Rodrigues, president and founder of The Bennet and Bernard Company, said low interest rates have been a crucial factor in reviving overall real estate demand and improving liquidity. situation that is vital for the sector.

“Overall, we believe this momentum is expected to persist not only through the remainder of this year but also well into 2024,” the expert added.

Cautioning investors, Amit Gupta, MD, Sag Infotech, said they should closely monitor the economy and be prepared in advance for any changes.

“It is important to note the underlying cautious stance, which implies that the RBI is maintaining a vigilant approach to combat potential inflationary pressures. Although things look promising for now, it is important for companies and investors to remain alert. They should watch carefully. “close the economy. and be prepared in advance for any changes in the bank’s rules. This will help them make wise decisions and contribute to a stable and growing economy in the future,” Gupta said.

See the latest stock market updates here. For all other news related to business, politics, technology, sports and automobiles, visit Zeebiz.com.

Leave a Reply

Your email address will not be published. Required fields are marked *