Stable FD rates will ensure a consistent flow of income for the retired; homebuyers can secure their dream home now
The Reserve Bank of India (RBI) has maintained its focus on monetary stability by keeping the repo rate unchanged at 6.5% for the seventh consecutive time.
The Reserve Bank of India (RBI) has maintained its focus on monetary stability by keeping the repo rate unchanged at 6.5% for the seventh consecutive time. This move aims to keep inflation in check within the targeted range while sustaining market momentum. The central bank’s strategy reflects careful consideration of robust economic indicators, amidst factors such as monsoon performance, decisions by the US Federal Reserve, and overall economic growth, ensuring continued high growth prospects for the country.
Nish Bhatt, Founder & CEO of Millwood Kane International says, “For the seventh consecutive policy review, RBI has kept its key rates unchanged at 6.5%. There was no change in stance of ‘withdrawal of accommodation’, indicating that the RBI continues to remain focused on inflation and is aligning its commitment to ensuring its descent to the target of 4%.”
Adhil Shetty, CEO, Bankbazaar.com says, “The expectation now is for rates to potentially adjust towards the end of this year when inflation moderates and the food inflation remains within expected parameters. This cautious approach by the RBI indicates a deliberate assessment of the impacts of previous rate actions and economic data before contemplating further adjustments.”
This decision also has implications for banks and financial institutions, particularly concerning lending rates like home loan interest rates, which are linked to the RBI’s repo rate. “A stable repo rate signals consistency in interest rates for borrowers, providing assurance to homebuyers regarding steady loan interest rates, beneficial for both new loans and existing ones with floating rates. Stable interest rates enhance affordability for potential homebuyers and foster consumer confidence, thereby sustaining demand in the real estate market,” said Shetty.
Additionally, Manju Yagnik, Vice Chairperson of Nahar Group and senior vice president of National Real Estate Development Council (NAREDCO) Maharashtra, said, “This move builds on the advantages of earlier policy announcements by widening the advantageous conditions for homebuyers. As a result, those considering becoming homeowners can still benefit from low-interest rates on home loans.”
The housing market is expanding rapidly, and maintaining steady home loan rates is essential to keep the market in check and raise consumer confidence in general. The RBI’s decision offers homeowners a significant benefit and much-needed relief in the face of rising housing costs.
“Buyers are satisfied with a steady repo rate since it gives them another opportunity to purchase real estate at a good price. This decision sets a base for the housing sector’s long-term stability and expansion and boosts the optimistic attitude currently permeating the market. With the understanding that the market is in a favourable position to support their investment decisions, purchasers can move confidently through it,” said Yagnik.
RBI’s decision will make sure homeowners have with affordable rates and relief from the standpoint of the rising housing costs. Aman Gupta, Director of RPS Group, said, “This measure is a continuation of the previous policy statement focused on strengthening conditions for homebuyers. Therefore, people decide to invest in homeownership because they have a financial opportunity to do so due to the low interest rates of home loans.”
Sanjoo Bhadana, Managing Director of 4S Developers, however, said, “For real estate, the pause in further rate hikes brings only temporary relief, since house loan rates remain elevated following the cumulative 250 basis point increase last year.”
On the other hand, fixed deposit (FD) interest rates, influenced by the repo rate, are likely to remain stable when the repo rate is unchanged. “This stability benefits FD investors, especially those seeking predictable income streams, such as retirees and conservative investors prioritising capital preservation and regular earnings,” said Shetty.
