India’s central bank, the Reserve Bank of India (RBI), decided to keep the benchmark repo rate – the rate at which RBI loans money to commercial banks – unchanged at 6.5 percent.
The move, decided at the bank’s Monetary Policy Committee (MPC) meeting on Thursday, August 8, is in line with the broader market expectations, and marks the ninth consecutive time it has decided to maintain the status quo on the interest rate.
The MPC also kept the apex bank’s policy stance unchanged, staying focussed on ‘withdrawal of accommodation’.
The other rates such as the standing deposit facility (SDF) rate also remained unchanged at 6.25 percent and marginal standing facility at 6.7 percent.
RBI policy meets market expectations
“There is a good amount of convergence in RBI policy and market expectation,” RBI Governor Shaktikanta Das said, while delivering his speech at the MPC meeting.
The governor also stressed that the base effect advantage may wear out from the December quarter of FY25, while asserting that ensuring price stability is very critical to ensure a period of sustained growth.
He also took cognizance to divergence in policy taken across the globe.
Industry players in several sectors, including real estate, described the RBI move as positive.
“Maintaining interest rates offers consistency in borrowing costs, which will prompt more aspiring homebuyers to consider taking the plunge – and thus drive demand in the housing market,” said Anuj Puri, Chairman of Anarock Group, a leading real estate consultancy in India and GCC.
“With interest rates staying steady, EMIs will remain manageable for current and potential homeowners, potentially leading to increased home sales – particularly in the price-sensitive affordable segment,” he said.
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