RBI Monetary Policy Springs No Surprises, Rates Unchanged

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By Anuj Puri, Chairman – ANAROCK Property Consultants

As expected, the RBI kept the repo rate and the reverse repo rates unchanged at 4% and 3.35% respectively while maintaining an accommodative stance, with a view to aid the economic recovery process. With consumer inflation still trending at the upper end, the RBI intends to keep an eye on it in the coming months. India is witnessing its worst second wave of COVID-19, thereby raising some uncertainty. On a positive, the real GDP forecast for the FY 2021-22 remains strong at 10.5% in the wake of the vaccination drive that is in full swing in India.

While repo rates will remain the same and home loan rates may remain stable, the incentive period for lower rates (starting from 6.7%) expired on March 31. SBI has already reverted to their normal rates and other banks will also follow suit. This may have some impact on the housing demand, especially in Maharashtra where the stamp duty cuts coupled with lowest-ever home loan rates had significantly boosted housing demand.

Now, with stamp duty cuts not being extended and benefits of lowest-best home loan rates also being rolled back, we may see some decline in overall sales volumes.

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