RBI Keeps Repo Rate Same: Good News for Retirees & Homebuyers

The Reserve Bank of India (RBI) decided to keep the repo rate steady at 6.5% for the seventh time in a row. This means they’re not changing the interest rate they charge on loans to banks. They’re doing this to make sure that prices don’t rise too quickly (inflation) and to keep the economy moving smoothly. The RBI is looking at different factors like how well the monsoon season is going, what decisions the US Federal Reserve is making, and how the economy is growing overall. This careful approach aims to keep the economy growing strongly in the future.

Nish Bhatt, the boss of Millwood Kane International, said that the Reserve Bank of India (RBI) has decided to keep its main interest rates unchanged at 6.5% for the seventh time in a row. The RBI’s stance on ‘withdrawal of accommodation’ remains the same, showing that it’s still focusing on controlling inflation and is committed to bringing it down to the target of 4%.

Adhil Shetty, who runs Bankbazaar.com, mentioned that people are expecting the rates to possibly change towards the end of this year as inflation decreases and food prices stay as predicted. The RBI’s careful approach suggests that they’re assessing the effects of previous rate changes and economic data before making any more adjustments.

This decision by the RBI also affects banks and financial companies, especially when it comes to lending rates such as home loan interest rates, which are connected to the RBI’s repo rate. “A steady repo rate means that the interest rates for borrowers stay consistent, giving homebuyers confidence that their loan interest rates will remain stable. This is good news for both new loans and existing ones with floating rates. Stable interest rates make it easier for people to afford homes and boost consumer confidence, which helps keep demand strong in the real estate market,” Shetty explained.

Manju Yagnik, who is the Vice Chairperson of Nahar Group and also holds a senior position in the National Real Estate Development Council (NAREDCO) Maharashtra, mentioned that this new decision adds to the benefits of earlier policies, making it even better for people planning to buy homes. She explained that with low-interest rates on home loans, potential homeowners can still make good deals.

She emphasized that keeping home loan rates steady is important as the housing market is growing quickly. This decision by the Reserve Bank of India (RBI) is a big advantage for homeowners, especially with the increasing costs of housing.

Yagnik pointed out that buyers are happy with the steady repo rate because it means they can still buy property at a reasonable price. This decision also helps in stabilizing and expanding the housing sector for the long term. It boosts the positive outlook people have towards the market. With this reassurance, buyers can confidently make investment decisions knowing that the market supports them.

The RBI’s decision will ensure that homeowners can afford their loans and get relief from the increasing costs of buying a house. Aman Gupta from RPS Group thinks this decision continues the previous policy aimed at helping people buying homes by keeping interest rates low.

However, Sanjoo Bhadana from 4S Developers thinks that while this pause in raising interest rates might help temporarily, the rates for home loans are still high after going up by 250 basis points last year.

On the other hand, when the RBI doesn’t change the repo rate, it means the interest rates for fixed deposits (FDs) are likely to stay the same. Shetty says this stability is good for FD investors, especially retirees and cautious investors who want steady income and want to protect their money.