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Monetary policy: Innovative, out of box, and 'Lucas unanticipated surprise'
After pandemic, this is the first time RBI has reduced policy repo rate by 50 bps to 5.5%
Soumya Kanti Ghosh
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Today's monetary policy committee (MPC) statement may be unexpected for the wider market in terms of the quantum of rate cuts but was in line with our assessment of ground reality and the needs of the economy. A robust gross domestic product (GDP) growth in the March quarter and broadbased falling inflation prepared the ground for the jumbo rate cut.
After the Covid-19 pandemic, this is the first time that the Reserve Bank of India (RBI) has reduced policy repo rate by 50 basis points (bps) to 5.5 per cent. This frontloaded larger cut will reinvigorate a credit cycle. The
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Time of India
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Pankaj Jain, Founder and CMD, SPJ Group says, 'At a time when the real estate sector is growing exponentially, the RBI bringing the repo rate to 5.5% will give a major boost to the sector. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market. Alongside, the move offers a stronger case for developers to expand in untapped micro-markets. As the demand for premium homes rises, the deduction will pave the way for sustained growth.' Mr. Adish Oswal, Chairman of Oswal Group, says, 'The RBI's decisive move to bring the repo rate down to 5.5% provides a strong impetus to both the economy and the real estate sector. The total 1% deduction in the last six months will enhance liquidity, empowering developers to accelerate project launches and completions. While firm reductions in home loan rates will improve affordability, particularly for first-time buyers. 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Piyush Kansal, Executive Director, Royale Estate Group, says, 'The RBI's decision to cut the repo rate to 5.5% is a well-timed boost for the real estate sector. This move will ease financial pressure on homebuyers and developers alike, prompting more individuals to invest in property purchases and driving demand across the housing sector. We expect this to spur stronger sales activity and foster sustained stability and growth in the market moving forward.' Ashwani Kumar, Pyramid Infratech, says, 'The RBI's move to reduce the repo rate by 50 basis points is a timely and growth-oriented decision that will strengthen buyer sentiment in the real estate market. Lower interest rates will enhance home affordability, especially for first-time buyers, and ease the financial burden on developers. This policy shift is expected to accelerate housing demand and contribute positively to the sector's recovery and long-term momentum.'
India.com
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