• Source:JND
Add as a preferred

RBI MPC Meeting:  The Reserve Bank Of India kept the repo rate unchanged at 6.5%, said RBI Governor Shakti Kanta Das while announcing the decisions taken in RBI MPC. The RBI governor said that second-quarter growth was much slower than expected. However, he also noted that high-frequency indicators suggest that the deceleration in domestic activity has bottomed out in the second quarter, indicating a possible sign of stabilization in economic trends.

Disclosing growth rate projections for FY25, Das said that real GDP growth for FY25 is now projected at 6.6%. Meanwhile, the growth rate is expected to be 6.8% in Q3, while the expectation for Q4 is 7.2%, higher than the previous quarter. The RBI expects real GDP growth to be 6.9% in the first quarter of FY26 and further increase to 7.3% in the second quarter of FY26.

The Reserve Bank projected inflation for FY25 at 4.8%. In Q3, the inflation rate would rise to 5.7%, however, it is anticipated that the rate would decline to 4.5% in Q4. As per the announcement made by the RBI governor, For Q1 FY26, the inflation rate forecast is at 4.6%, while it will take a plunge in FY26 Q2 at 4%.

Also Read: 8th Pay Commission News: Big Disappointment For Central Govt Employees; Here's What FinMin Says On Salary Hike

The six-member Monetary Policy Committee (MPC), headed by Reserve Bank of India (RBI) Governor Shaktikanta Das, commenced the bi-monthly meeting on Wednesday to determine repo rates and other monetary policies for the next two months. Das presided over the last MPC meeting of his present term, which ends on December 10.

The RBI has retained the repo or short-term lending rate unchanged at 6.5 per cent from February 2023. The repo rate was finally raised to 6.5 per cent. This maintains the rate at the same level until February 2023 and beyond.

The government has directed the RBI to guarantee that consumer price index (CPI)-based inflation stays at 4 per cent with a 2 per cent margin on both sides. In its off-cycle meeting in May 2022, the MPC increased the policy rate by 40 basis points, followed by rate hikes of various magnitudes in meetings until February 2023. The repo rate was increased by a cumulative 250 basis points between May 2022 and February 2023. 

Also Read: Government To Increase Number Of Post Office Passport Seva Kendras To 600 By 2028-29: Details

Industry Reaction To MPC Decision

Ramesh Menon, Founder Director, of Delhi Consortiums welcomes the RBI's decision to keep the repo rate unchanged at 6.5% for the 11th consecutive time.

"The Reserve Bank of India’s decision to keep the repo rate unchanged at 6.5% reflects a supportive stance toward maintaining economic stability. It will provide financial reassurance to developers and homebuyers, encouraging investments in residential and commercial projects. Additionally, allied industries such as construction, cement, and steel will benefit from the sustained momentum in the real estate sector," said Ramesh

"The stability offered by this decision supports steady economic growth, preserving job creation and upholding social and economic standards. The reduction in the cash reserve ratio (CRR) will further complement this effort by addressing liquidity challenges, pushing credit growth, and enabling smoother financial operations," he added.

Pawan Sharma, MD, of Trisol RED, believes that RBI's decision would ensure economic stability amid global uncertainties.

"The RBI's steadfast approach to maintaining the repo rate at 6.5% reflects its commitment to ensuring economic stability amidst global uncertainties. This consistent policy not only helps mitigate inflationary pressures but also fosters a conducive environment for sustained economic growth. A stable interest rate environment encourages confidence among investors, promotes steady inflows of capital, and provides the real estate sector with the predictability required for long-term planning. This decision will continue to support housing affordability and drive the momentum of infrastructural and urban development across the country," said Pawan.

SKA Group Director Sanjay Sharma says,  "RBI has once again met buyers' expectations by keeping the repo rate stable at 6.50% for nearly two years. After the last Monetary Policy Committee meeting, we were expecting a rate cut based on the RBI's stance. However, this decision will not only keep interest rates stable for potential buyers but also maintain public confidence. This is a welcome move by the RBI, and we hope that the rapid growth in the real estate sector will continue. This decision will benefit both buyers and developers. Additionally, the 25 basis points reduction in the CRR will increase liquidity in the market, which, in turn, will indirectly benefit the real estate sector."