Experts back status quo stance
However, Governor’s tone was slightly hawkish, as he continued to highlight the inflationary concerns
Experts back status quo stance
We also diligently acknowledge the key areas of concern highlighted by the RBI Governor today including the need to closely monitor alternate investment avenues, be vigilant on personal loans, adhere to loan-to-value ratio - George Alexander Muthoot, MD, Muthoot Finance, tells Bizz Buzz
Mumbai: Experts have commended the RBI’s commitment to maintaining stability in India’s financial system by keeping the repo rate unchanged at 6.5 per cent and its stance on ‘withdrawal of accommodation’.
This prudent approach is crucial, particularly given the uneven expansion owing to geopolitical tensions in the Middle East. Despite these challenges, we are glad to witness stability in domestic economic activity on the back of the steady progress in South-West monsoons, they said.
Talking to Bizz Buzz, George Alexander Muthoot, MD, Muthoot Finance, said: “We take pride in RBI’s appreciation of the Indian financial system as it has been able to maintain resilience and showcase broader macroeconomic stability. At the same time, we also diligently acknowledge the key areas of concern highlighted by the RBI Governor today including the need to closely monitor alternate investment avenues, be vigilant on personal loans, adhere to loan to value (LTV) ratio, risk weights and monitoring of end use of funds, and unprecedented global IT outage.”
The Reserve Bank of India (RBI) Governor Shaktikanta Das announced the Monetary Policy on Thursday. The central bank has kept the rates unchanged at 6.5 per cent for the last 18 months.
As housing demand rises due to favourable interest rates and taxation, there will be a boost to real estate sector. This will encourage more project construction, job opportunities and broader economic gains. The collective impact of these measures improves affordability levels and boosts demand dynamics in India’s housing segment.
“Average residential prices across the top-seven cities have seen a significant jump in the last one year – ranging between 13-39 per cent in Q2 when compared to Q2 2023. Thus, the breather which RBI’s unchanged repo rate will provide to home loan borrowers is apt and welcome. The overall tone of the policy seemed hawkish with the RBI highlighting the risks around stickiness in food inflation,” said Abheek Barua, chief economist at HDFC Bank.
