RBI keeps repo rate unchanged due to inflationary pressures
The RBI kept the repo rate unchanged due to inflationary pressures
image for illustrative purpose
Mumbai, Dec 06: The RBI kept the repo rate unchanged due to inflationary pressures.
Despite the GDP growth rate for Q2 FY25 being significantly lower than expected, the RBI is unlikely to shift its stance to accommodate growth. High-frequency indicators show early signs of recovery in the second half of the fiscal year, but inflation risks remain elevated.
Kanika Singh Chief Risk Officer– IMGC, says, “Affordability has become challenging as loans remain expensive and property prices have steadily increased.”
Residential real estate sales have moderated, with high-end, mid-end, and affordable segments largely flat over the last quarter.
Factors such as high capital values, inflation pressures, and uncertainty around the RBI's repo rate cut may lead some homebuyers, especially in metros, to adopt a wait-and-watch approach. Meanwhile, Tier 2 and 3 cities continue to drive growth in housing loans.
Sandeep Bagla, CEO, TRUST Mutual Fund says, "As widely expected, RBI/MPC kept repo rates unchanged. Growth is lower than expected, and inflation higher, above RBI comfort levels. It is possible that growth will pick on back of renewed.”
Government spending in the second half of the financial year. There is pressure on Rupee from sustained FPI selling in equities. Any rate cuts would weaken the Rupee as well. RBI is likely to reduce rates in February policy, once inflation starts easing again. 2 out of 6 MPC members voted for a rate cut, which shows that possibility of rate cut in February are very high.
